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Here are the discounted variable rate moving home or purchase mortgage results. You can alter your search to reflect the actual amount you want to borrow and the value of your property. If you would like more information about discounted variable rate mortgages read our guide below.

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Cumberland BS Logo
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Total Repayable Over years
Speak To A Broker
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First Time Buyers
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Remortgage
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Furness BS Logo
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Maximum Loan to Value

First Time Buyers
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Maximum Age
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Cumberland BS Logo
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APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
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Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

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Maximum Age
Minimum Income
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Flexible Features

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Leeds BS Logo
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APRC
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Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
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Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Progressive BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Cumberland BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Cumberland BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Monmouthshire BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Loughborough BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Progressive BS Logo
Rate
%
APRC
Product Fees
Initial Monthly Payment
Total Repayable Over years
Speak To A Broker
Maximum Loan to Value
Charges and Fees
Application Criteria
Flexible Features
Incentives
Revert Rates

Maximum Loan to Value

First Time Buyers
Second Time Buyers
Remortgage
Minimum Loan
Maximum Loan

Charges and Fees

Early Repayment Charge
Exit Fees

Application Criteria

Maximum Age
Minimum Income
Available To

Flexible Features

Underpayments
Overpayments
Payment Holidays
Draw Down
Lump Sum

Incentives

Revert Rate

Representative Example

Disclaimer

Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing

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Still not sure?

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Fixed rate mortgage guide

Find out how fixed rate mortgages work and their pros and cons.

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What is a tracker mortgage?

Confused about tracker mortgages? Our handy guide has the info you need

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How much can I borrow for a mortgage?

This guides provides you with the information you need know when deciding how much you can borrow for a mortgage.

Read More
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What is LTV?

Our guide explains what LTV (Loan To Value) is and how it will affect what type of mortgage you can get

Read More

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What is a discounted mortgage?

Leanne Macardle

Leanne Macardle

Editor
Published: 29/01/2019

At a glance

  • Offers a lower interest rate than a lender’s standard variable mortgage for a set period.
  • Even though rates will be lower than your lender’s SVR they can still go up or down depending on the Bank of England’s base rate.
  • ‘Collar rates’ are sometimes in place to set a limit on how low interest rates can drop on this type of mortgage deal.

Discounted variable rate mortgages offer a discount on a certain interest rate, most commonly a lender's standard variable rate.

The discount can be for an introductory term of two, three or five years, or it could even be for the entire term of the mortgage (a lifetime discounted rate).

How does a discounted rate mortgage work?

A discounted rate mortgage uses a variable interest rate – so your payments can go up and down. They work by offering a set discount on a lender's SVR.

So, if the lender's SVR is currently 3.00% and the discounted rate offers a 1.00% discount, you'll initially pay 2.00%.

Then, if the SVR goes up to 4.00% later, your discounted rate would go up to 3.00%. If the SVR goes down by 1.00%, your discounted rate would also go down by 1.00%. To find out when a lender may increase or decrease their SVR (and therefore any discounted rates linked to it), see our SVR guide.

When your introductory period comes to an end, you will most likely move onto your lender's SVR.

Discounted rates tend to come with an early repayment charge, if you pay off the mortgage early or remortgage to another lender during the introductory period. However, most will let you make overpayments – normally up to 10% of the outstanding balance per year.

If you have a lifetime discounted mortgage, the early repayment charge will probably not apply for the full term of the mortgage, but only for an initial two to five-year period (depending on your lender).

Although discounted mortgages may sound like a good deal, they're not necessarily the cheapest mortgage rates available. For example, you may be able to find a cheaper tracker mortgage. Remember: discounted mortgages have variable rates, which means you won't get the same payment security as you do with a fixed rate.

Some discounted mortgage rates can only go so low

Collar rates are becoming more common since interest rates hit all-time lows. These basically mean that the mortgage rate, and therefore your mortgage payments, can only go so low.

So, if a lender’s SVR was reduced to a level that sent the discounted mortgage below the collar, your payments would not go any lower than the collar rate.

Where can I compare the best discounted variable mortgages?

If you’d like to see what deals are currently available, try our Best Discounted Variable Mortgage comparison.

Pros and cons of discounted mortgages

  • When interest rates are low your repayments will be lower.
  • Discounted rates can have quite low mortgage arrangement fees in comparison to a fixed rate or tracker.
  • Your interest will track against your lender’s SVR, meaning if this increases so does your monthly payment.
  • If interest rates go up, so will your payments. An increase of just 1% could add an extra £83 a month to your repayments for a £100,000 mortgage.
  • Although they have the word "discount" in the title, discounted mortgages may not be the cheapest rates on offer.
  • Some discounted rate mortgages have an interest rate collar, which means that your payments cannot go below a certain point.

Moneyfacts tip

Moneyfacts tip Leanne Macardle

Check carefully as to what, if any, collar rate applies to your discount mortgage and for how long.

paper with question marks in clear jar

At a glance

  • Offers a lower interest rate than a lender’s standard variable mortgage for a set period.
  • Even though rates will be lower than your lender’s SVR they can still go up or down depending on the Bank of England’s base rate.
  • ‘Collar rates’ are sometimes in place to set a limit on how low interest rates can drop on this type of mortgage deal.
Best discounted variable rate mortgages
Provider Rate APRC Max LTV
MBS Lending Ltd Logo MBS Lending Ltd Discounted Variable 5.99% 6.3% 70%
MBS Lending Ltd Logo MBS Lending Ltd Discounted Variable 5.99% 6.3% 60%
Hanley Economic BS Logo Hanley Economic BS Discounted Variable 5.25% 5.6% 70%
Kent Reliance Logo Kent Reliance Discounted Variable 5.24% 6.4% 80%

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