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Step 2
Find a timescale that suits your circumstances. Discount deals all tend to last for different amounts of time. Some disappear after a matter of months – you only pay the discount rate for, say, three months while you find your feet in your new home. Then you are charged the full rate. Fortunately most discounts last longer. The most common deals will last for two years, though you can also find some for three, five, ten years or more. Some last for the term of your mortgage, however long this will be. Of course the discounts themselves will vary according to the term and in general the deepest discounts last for the shorter periods. When the discount period ends the rate you pay will automatically be changed to your lender’s standard variable rate – a process which can trigger something the industry calls ‘payment shock’. But fortunately you should be able to avoid this by switching from one low rate deal to another when your discount ends. See further on for more information. One final bit of good news. Most discount deals are portable, so you can move house and take the deal with you, borrowing more in the process if your income allows it. The one thing you probably can’t do, without paying big penalties, is to opt out of the discount before the end of its term. You are only free to move around once the discount period ends.
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