• Standard Variable Rate (SVR) Your payments move up or down at the lender's discretion. Their decision may be influenced by changes in the Bank of England’s base rate. • Tracker Rate A variable rate loan with an interest rate that's equal to or a set amount above or below the Bank of England base rate, or some other base rate (eg: LIBOR). It tracks (moves up or down with) that rate. Other base rates may still be influenced by changes in the Bank of England’s rate. At the end of the deal period, the lender usually charges you its standard variable rate. • Discounted Rate Your monthly payments can go up or down, but you get a discount on the lender's standard variable rate for a set period of time. At the end of the deal, you usually change over to the full standard variable rate. • Fixed Rate Your payments are set at a certain level for an agreed period. At the end of that period, they'll usually switch you to the standard variable rate. • Capped Rate Your payments are variable and often linked to a base rate, but fixed not to go above a set level (the 'ceiling' or 'cap') during the period of the deal. At the end of the period, you are usually charged the lender's standard variable rate. Changes in the Bank of England’s interest rate may influence the lender’s rate. The impact depends on if it’s tracking a base rate or not. • Collared Rate May be used in combination with a capped rate or a tracker (or both). Your payments are variable but will not fall below a set level (the 'collar').

Repayment (Capital & Interest) mortgage Under a repayment mortgage your monthly repayments consist of both interest and capital hence, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly during this period. Interest Only mortgage As their name suggests, with an interest only mortgage you only repay the interest on the mortgage. At the end of the term the capital is still outstanding. Therefore you will usually need to take out some kind of investment policy to save up enough money to repay the mortgage at the end of the term. Traditionally the preferred product for repaying the capital of an interest only mortgage was a mortgage endowment policy (which included a set amount of life cover) – although more recently customers are using Individual Savings Accounts (ISAs) and pensions to build up a sufficient sum and taking advantage of the tax breaks offered by these products.