The benefits of variable rate mortgages

When considering fixed rate or variable rate mortgages there are lots of factors to take into account regarding your personal situation as well as the rates on offer and associated mortgage fees.

In the mortgage market the average rate for two year tracker mortgages remains 0.44 per cent lower than in early 2009 enabling more cost effective mortgage deals.

One of the main advantages of variable rate mortgages is that they often have lower mortgage repayments than that of a fixed rate mortgage, so if you would like lower repayments initially then a variable rate may be preferable.

If your budget dictates that lower repayments would be of benefit due to your circumstances then lenders such as the Co-operative Bank have lifetime tracker mortgages available. These mortgages come with rates from 2.79 per cent and are accessible with 75 per cent and 85 per cent loan to value.

Variable rate mortgages follow the Bank of England base rate and so rise and fall when this does, so over the term of your mortgage when the interest rate falls then your repayments fall reducing you household outgoings.

Variable rate mortgages can often allow more flexibility than fixed rate mortgages as they often incorporate additional features. Some of the flexible terms the lender may allow are over-payments, underpayments and one off lump some payments as well as payment holidays.

The terms of repayment flexibility and the variations in repayments will always depend on the terms set out by the individual lender.