What is a...

Discounted Rate Mortgage

A Discounted Rate Mortgage is a mortgage with a limited time reduction on the lender's standard variable rate of interest. Usually these are only intended to be 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 particularly high but want to have some money to spare for 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.

Will a Discounted Rate Mortgage appear on my Credit Report?

As long as your lender shares the mortgage agreement with the Credit Reference Agencies, then the account will appear on your Credit Report, although it’s unlikely to specify that it is on a discounted rate.

You can use checkmyfile to see your Multi Agency Credit Report, which gathers your data from Equifax, Experian, TransUnion and Crediva onto a single, easy-to-use platform. Try it free for 30 days, then for just £14.99 per month. Cancel online at any time without fuss.

What is the difference between a discount rate mortgage and a tracker mortgage?

While a tracker mortgage adjusts based on the Bank of England base rate, a Discount Rate Mortgage varies based on the lender’s Standard Variable Rate.

The UK's First Provider Of Online Credit Reports

Launched 21 Years, 35 Million Credit Scores & 8 Million Credit Reports Ago

The UK's First Provider Of Online Credit Reports

Related Jargon