Variable Discount and Cashback Schemes

Variable Rate
The interest rate on a variable rate mortgage can change during the term of your mortgage, broadly in line with interest rates in the economy as a whole. This may be useful if you want to keep your mortgage straightforward. You need to be sure that you can afford any potential increases to your mortgage payments in the future.

Discounted Rate
Some lenders will offer a discount off their standard variable rate for a short period. Usually this will be between 3 months and 5 years. This means that you will have cheaper payments for a period of time. The rate that you pay could vary; additionally once this discount has expired the interest rate will revert to their standard variable rate. You need to be sure that you can afford potential increases to your monthly repayments during the scheme period and once this finishes.

Cashback
As an incentive to take out a mortgage, some lenders offer cash back on completion. These can be particularly appealing to first-time buyers who may want to buy carpets, furnishings etc. Often the lender will charge you their Standard Variable Rate and expect you to stay on this for a period of time. Occasionally lenders offer smaller cash back schemes in combination with other rates i.e. discounts or fixed schemes.