| This is a specific type of variable rate product.
The interest rate charged tracks a base rate and this means therefore
that the interest rate is variable also.
When the loan is set up customers are advised of the appropriate
‘margin’ to be applied to the loan. With this scheme
you are guaranteed that a change in base rate will be reflected
in the mortgage rate payable.
This type of scheme may attract an initial fee to the lender to
set up the scheme.
In addition there may be redemption penalties on the loan if it
is redeemed within a certain period of time.
|
