There are many different interest rate options available which are summarised below:-
Variable Rate
The most straightforward interest option is the variable rate. The interest rate charged will change from time to time in line with market conditions.
Fixed Rate
In this case the rate of interest is fixed at outset for a prescribed period. As a result the level of monthly interest is certain for the period of the agreement.
Rates vary from time to time and reflect not only current market conditions but also future expectation on interest rate movements.
Discounted Rate
A discounted rate mortgage is one where the interest for an initial period of the loan, commonly one or two years, is charged at a lower rate than that which would normally apply. The discount is normally taken from the variable rate to leave the net rate payable.
Capped and Collared Rates
This is a method of limiting interest rate fluctuations without fixing them entirely. As a result it is possible to achieve reasonable certainty of the level of monthly interest.
A capped rate loan specifies the maximum interest rate that could apply, while a collared rate loan is the minimum that could apply.
Cashback Loans
Although not strictly an interest rate option, a cash back loan entitles you to receive a cash bonus at the time the loan is completed.
Vantis Financial Management Limited will provide you with an unbiased appraisal of the most appropriate interest rate option for your circumstances.
NB. Where a loan is granted on terms other than a straightforward variable rate, there are often special terms attached. These terms can include penalties, and should be considered before any decisions are made.