Almost all commercial mortgages in the UK will be funded by building societies, credit unions or banks. In fact, the State retains the power of the housing market, leading to increased competition between mortgage lenders and the development of one of the most innovative mortgage markets in the world. This is obviously for the benefit of prospective home buyers in the UK.

It was in 1982 that led to a significant liberalization of ownership for the substantial increase in product packages and variety of innovative mortgage plans offered by companies competing for greater market share. For this reason, an agreement rate of different packages originated, and it is therefore imperative that the buyer of the home for independent mortgage advice in the decision.

As mentioned above, which receive the bulk of the mortgage banks for the financing of building societies, credit unions or banks in the money market functions. Therefore, most mortgage rates to find their way into the groove established in the market as a variable rate. This may be a variable rate or the company "standard" or a "rate tracker ', linked to the Bank of England repo rate.

The main change to this trend is generally in the form of various incentives and marketing mortgages are to attract new customers. The variations of the main types are: fixed prices, limit prices, low prices, or "cash back" option.

The fixed exchange rate

This provides a uniform interest rate for a certain specified period. It is very durable, for these packages, determine if the interest rate fixed for a period of over five years. A period of less than five years usually results in the fixed interest rate is too high compared to market rate.

Price cap

Capped rates are very similar to fixed prices, unless they can change a few. Basically, there is a minimum and a maximum price ceiling. This means you will not pay a certain rate, but not have to pay under a certain phrase. In this type of agreement often wonder what a "collar" means. The neck is the minimum interest to be paid every month. The top mortgage agreement provides mainly be about the same time as the special fixed interest rate.

The discount rates

Discount rate mortgage options, you will find a series of margin rate discount on monthly payment. For example, you can assess a 2% discount on the standard variable mortgage company. Can be packaged as a discount on mortgage rates, the rate in BOE. Different plans have different discount rate mortgage increases and decreases in motion by the course of the amortization of the mortgage. The pattern is specified in the rule.

Cash-Back Options

Another mortgage option gives you a percentage of the mortgage as cash in hand from the beginning. This renewal of the cash back option gives you more money to pay existing debts, or better yet, its new ownership. Most often, this package comes with a standard variable rate or tracker mortgage the usual rate.

These mortgage rate options may seem confusing at first time mortgage buyer, and many offers packages combining higher rate makes it difficult to pay the mortgage.