You pay a set percentage above or below the Bank of England base rate. Your interest rate automatically changes in line with the Bank of England base rate and therefore is not affected by your lender's standard variable rate.
You benefit immediately from any reductions in the Bank of England base rate. A lender may delay lowering its standard variable rate, so other mortgage types may not benefit immediately.
If the Bank of England base rate rises, your mortgage payments increase by the same percentage immediately. You have none of the security of a fixed rate or capped rate.
If you would like to have a talk about the type of mortgages available, please call our independent Advisers today.