This type of mortgage offers a discount off the lenders standard variable rate for a set period of time. The customer has to ascertain if economic circumstances are going to see the market rise or fall.

The advantage of having a discounted mortgage is that when rates generally fall then the payable rate becomes less. The disadvantage is that when rates rise the payable rate can increase significantly and with no ceiling limits.

 This type of mortgage generally has early repayment charges during the discounted period.

 

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Rainbow is a trading style of Havering Financial Consultancy who is an appointed representative of Intrinsic Financial Planning Limited which is authorised and regulated by the Financial Services Authority.