Remember the part 1 of this article?
Now let’s read the rest of the facts of rate rises topic.

Tracker mortgage

By taking a tracker mortgage, your monthly repayment will rise when the Bank of England increases the base of interest rate. However, when the Bank of England decreases the base rate, your monthly repayment will drop as well.

Hence, tracker mortgages can be a good option for you who have a flexible income if you are looking for a mortgage product because a flexible income commonly can resist effectively with the repayment fluctuations.

Capped rate mortgage

Taking a capped rate mortgage can give you benefit that is the rise in the interest rate may or may not affect your repayment. The effect will depend on the cap which means that your interest rate rises only up to the cap and no further when there is a rate rise rises to above the cap.

Capped rate mortgage is a good choice especially when the interest rates are high and fluctuating. You will never know how far your finance will stretch in the future. So, protecting it with a capped rate mortgage is worth considering so that you can take the benefit when the interest rate falls significantly during your mortgage term.

Discount rate mortgage

As what a regular variable rate mortgage applies, a discount rate mortgage interest rate will also rise if the lender decides to raise the interest rate during your term period. What makes them significantly different is the impact of the rise on your finance. With a discount rate mortgage, you will be able to get lower interest rate during the first period of your mortgage term.