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Mortgage types

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Variable Rate Mortgages

Based on the Society’s standard variable rate. A variable rate mortgage is one that changes when the Society announces interest rate changes. So, if interest rates increase, your repayments will increase and if interest rates reduce, your repayments will reduce.

Fixed Rate Mortgages

A fixed interest rate mortgage is a loan where the interest rate applying to the loan is fixed for a specified period of time and does not change irrespective of any general interest rate changes which may apply from time to time. There will usually be a fee to pay to enable the funds to be reserved.

If you take out one of these loans your monthly repayments may be lower than they might otherwise be for the period of the fixed rate had the mortgage been at the Society’s standard variable rate. However with a fixed rate it is worth remembering that this could be higher than the Society’s standard variable rate.

Discounted Rate Mortgages

A discounted rate mortgage is one where a set interest rate reduction or discount is applied to the Society’s standard variable rate for a specified period of time. Therefore, the rate you pay will vary if the Society’s standard variable rate changes.

Tracker Mortgages

With our Tracker Mortgages the interest rate is variable but is linked to the Bank of England base rate. Irrespective of reductions in the Bank of England base rate, we will never reduce the rate you pay below 3%. This is known as a "collar" or "floor" rate.

Capped Rate Mortgages

A capped interest rate mortgage is a loan where the interest rate on your mortgage cannot increase above a quoted maximum rate for a fixed period of time. This allows you to obtain the benefits of any reduction in mortgage interest rate but protects you from significant increases. There will usually be a fee to pay to enable the funds to be reserved.

If you take out one of these loans your monthly repayments may go up or down but the amount the rate can rise to is restricted to an upper limit (known as the cap) for the period of the capped rate.

Your monthly payment may increase at the end of the capped rate period.

Cashback

A cashback is an incentive payment paid to you or your solicitor on completion of the loan.

General

When you take out your loan we will give you an indication of what your monthly repayments might be once your discount, fixed or capped rate period ends. This will be based on the Society's standard variable rate at the time we offer you the mortgage. We cannot tell you the exact amount as we will not know how interest rates will change.

However, once this period has ended your monthly repayments will usually increase. If there have been a number of interest rate changes during this time then the increase could be quite large. You may hear this referred to as ‘payment shock’. We strongly recommend that you make sure before you take out one of these mortgages that you will be able to afford the increased monthly repayments.

Early Repayment Charges

If you choose a product with an incentive it is likely you will pay an early repayment charge if you repay all or part of the loan within the incentivised period - Please see section ‘Early Repayment Charge’