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Variable Rate Mortgage Products
The mortgage market is full of all types of mortgage products that knowing what each of them implies is the key to getting the right one, in case of need.
One such mortgage product is the variable rate mortgage. There are four subcategories, the standard, the discounted, the cashback and the tracker ones, each different in their own ways but all characterized by their possibility of going up and down, hence their variability.
The most common mortgage product is the standard one, through which the interest rates might vary throughout the term upon the influences of the base rate, as well as the competitors and the bank's rates.
On the other hand, another frequently used mortgage product is the discounted one, which, as the name itself implies, offers a discount for a set period of time. For instance, you might get a discount every two years for two months or the whole fist year and so on. However, this mortgage product has its risks, in case you want to quit it during the discounted period. You are then supposed to pay a lot of penalties.
Another mortgage product that might raise your interest is the cashback one. These mortgages offer and incentive of percentage of a loan paid as a lump sum at the beginning of the mortgage.
Eventually, the tracker mortgage is the mortgage product that is also variable as it tracks movement in rate indicators. The tracker may only last for shorter periods of time, and may be accompanied by early repayments. However, you have to be aware that the rate indicators are not merely a subject to be decided by the bank itself, but rather by some independent organizations. You cannot therefore know in advance whether they will affect your mortgage or not, or whether they'll act in you advantage or not.