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Discounted Rate Mortgage

Definition of 'Discounted Rate Mortgage'

A reduction on a mortgage lender's standard variable rate of interest that applies only for a set period of time. Usually an introductory offer. When the standard variable rate fluctuates, the discount will remain fixed, however, the amount of discount and the period will vary from deal to deal.

Discount mortgages tend to be more suitable for people who prioritise low initial payments at the expense of higher rates later on, such as first time buyers whose income isn't so high but want to have some spare cash to spend on other necessities. The discount rates usually last from six months to about five years and generally the shorter the period of discount, the higher the discounted rate will be.

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Discounted Rate Mortgage

Definition of 'Discounted Rate Mortgage'

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