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MORTGAGES

Fixed Rate Mortgage.

A Fixed Rate Mortgage is where the interest rate in which you pay on your mortgage stays the same throughout the length of the term of the mortgage, typically ranging from two to five years. This gives people the peace of mind that their monthly payments will stay the same throughtout the length of their term. It is helpful to note that Fixed Rate Mortgages are typically slighty higher than that of a varibale rate mortgage.

Once the length of your term comes to an end you are automatically transfered over to your lenders standard variable rate which is typically higher than that of what you would of been previously paying. It would be a good idea to research and look around for any new mortgage deals you can transfer over to a few months before the end of your term. There may also be additional charges if you choose to leave the mortgage contract you are currently tied into early so make sure you are 100% sure before siging up.

Variable Rate Mortgage.

A Variable Rate Mortgage is when the interest rate you pay on the mortgage can change at anytime menaing the payments you pay may vary from month to month based on the interest rate at that time. It is helpful to note that Variable Rate Mortgages come in many forms.

Standard Variable Rate.

A Standard Variable Rate Mortgage is the standard interest rate at which the mortgage lender charges the homebuyer. Interest rates may change after either a rise or fall in the standard base rate set by the Bank of England. This type of mortgage will last either until it is fully payed off or if you transition to another mortgage deal. It is helpful to note that you have a lot more freedom with this type of mortgage deal allowing you to over pay or leave at any time.

Discounted Mortgage.

A Discounted Mortgage is when the lender offers a discount on their Standard Variable Rate (SVR). This only applies for a certain period of time, eg the first two or three years. The main advantage of this type of mortgage over others is that the rates start off cheaper therefore keeping monthly payments low. It is helpful to note however, that the lender can rise its standard variable rate at any time as well as the fact that if the Bank of England base rate rises, the discounted rate will also rise.

If you choose to leave before the end of of the discounted period you will have to pay additional charges.

Tracker Rate Mortgage.

A Tracker Rate Mortgage is when the interest rate set by the lender is in line with that of another interest rate, that usually being the rate set by the Bank of England. The lender typically implements a slightly higher interest rate than that of the one it is in line with. These types of mortgages typically only last two to five years however some lenders may offer terms that last the life of the mortgage. It is helpful to note that the rate in which it is tracking can both fall and rise either decreasing or increasing your monthly payments.

In the case that you want to change lender before the end of your term you will most likely have to pay a repayment charge. 

Capped Rate Mortgage.

A Capped Rate Mortgage is an interest rate that is typically in line with that of the Standard Variable Rate however there is a limit as to how high the interest rate can rise. It is helpful to note that the cap on these terms is typically very high, higher than that of the most variable and fixed rates. The lender can also change the interest rate at any time up to that of the cap so it is vital you make sure you can afford repayments if the rate rises to the cap. 

What Can OCC Do?

The OCC platform will check the financial statements of all mortgage types, identify any overcharging on rates, fees and additions as well as a full review of your contractual terms for any compliance breaches via a full compliance analysis.