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Get free discount rate mortgage quotes using our online quote system below. Search for discount mortgage rates from the whole market, receive upto £150 cash back on completion when you submit your mortgage application online, and get expert independent advice from one of our qualified advisors.

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To request discount rate mortgage advice from one of our qualified mortgage advisors you can either follow the link above and complete our short enquiry form or complete the call back request to your left. Our mortgage advice service is independent, whole of market and typically fee free and you may receive upto £150 cash back on completion.

Discount Mortgages Explained

Discount mortgages are a form of variable rate mortgage product. Changes in interest rates will affect the monthly mortgage repayments and these will vary throughout the life of the mortgage moving up and down as market conditions change.

A discount mortgage rate follows the lenders standard variable rate minus a certain percentage which is the discount. Standard variable rates are set by the mortgage lender and although they tend to move in line with changes to the Bank of England Base Rate it is important to remember that the lender is not obliged to change it's standard variable because the BBR has changed.

In fact it is common for lenders to change their standard variable rate for many other reasons, particularly in order to be able to offer a better savings interest rate when the bank or building society needs to raise further capital from retail deposits. During the credit crunch many borrowers on discount and variable rates have suffered in comparison to those on trackers as banks have failed to pass on the huge reductions in Bank of England Base Rate as it would have put them in even greater risk of collapse due to an inevitable reduction in savings deposits cuasing a run on the bank much like that which happened to Northern Rock.

Discout rate mortgages tend to be quoted as the standard variable rate less the discount giving the current payment rate. For example if a lenders SVR was 5% and they had a discount rate 2.5% percent this would indicate a discount of 2.5% from their SVR.

Discount mortgage rates can however offer good value money, and in most cases variations in the Bank Base Rate will be reflected by the Discount rate as well. When considering whether to arrange a discount product against a tracker for example it will usually be a case of deciding whether the difference in rates available will justify the extra risk that a discount rate could pose.

The lender in question may play some part in this decision, high street banks and large buildings societies need to strike a balance between competitive savings rates and mortgage rates, so will often offer a fairly competitive standard variable. More specialist lenders however are less likely to offer a continually competitive standard variable and so more care should be applied when taking a discount with these types of lenders.