Variable Rate Mortgage
The Deal:
Advantages:
- Flexibility within the mortgage market
- The option to move from lender to lender to take advantage of more competitive rates.
- Avoiding any early redemption penalties, with the ability to benefit from rate cuts as they occur.
Disadvantages:
- Generally the rate will not be competitive in relation to the market
- Exposure to interest rate rises.
Suitability:
A variable rate mortgage is the most suitable option in a number of circumstances the most common being those identified below:
- Individuals borrowing money over a very short term
- Anticipation of repaying the loan early without incurring penalties on all or part of the loan.