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Understanding a Variable Rate Mortgage: A variable rate mortgage has an interest rate that can change over time, meaning your monthly payments may go up or down. This flexibility can be advantageous if rates drop but could lead to higher payments if rates rise.
This differs from a loan where the interest rate is fixed for the whole duration.
Variable rates are often linked to the Bank of England’s base rate or the lender’s standard variable rate (SVR). When these rates fluctuate, your mortgage rate and monthly payments adjust accordingly. This type of mortgage can lead to savings when rates are low, but may result in higher payments if rates rise.
A variable rate mortgage offers flexibility and the potential for lower payments if rates fall. However, it also carries the risk of higher costs if rates increase. This option may suit borrowers who can handle possible changes in payments and want to benefit from potential rate drops.
With flexible options, in-depth expertise, and dedicated service, we’ll support you from application through to completion, ensuring a smooth mortgage process and tailoring a solution to suit your financial needs and goals.
Speak to a Foligno & Co specialist at (01792 687237)