What is a Variable Rate Mortgage Loan?
A mortgage deal that comes with a variable interest rate will have monthly repayments that may change over time. These mortgages are tied to a lender or bank base rate. If this rate rises, then payments go up; if it drops, then they go down. A fixed interest option, on the other hand, will come with set payments that will not change over the term of the deal. At a basic level these mortgages are tied into a lender’s Standard Variable Rate (SVR). This rate will be connected to an underlying bank base rate. Taking an SVR deal is not necessarily the best option, however, as each lender is likely to offer variable deals at lower rates. document.getElementById(‘adsense_placeholder_1’).innerHTML = document.getElementById(‘adsense_ad_1_hidden’).innerHTML; What are the Advantages of Variable Mortgage Rates? Any kind of mortgage deal comes with benefits and downsides. The primary advantages of taking a variable rate include: • If interest rates go down then homeowners can take advantage of lowe
