Explain a discounted mortgage to me

[chriz1]

So like many my deals coming to an end in November
When searching price comparison sites I found one that says its a 2 year discounted deal but when I called the broker of this site they confused me and offered me another true fixed mortgage which was next cheapest and was £110 more a month. Obviously my main aim is to have cheaper monthly payments

So I'm confused what this discounted deal was and why they didn't advise gping with it ?

It was with Beverly on a 2 yr fixed or what I thought was

[BoRED S2upid]

As I understand it it’s not a fixed rate so say it’s at 4% and the interest rate was at 6% it’s discounted by 2%. If interest rate goes up to 6.5 your rate would go up to 4.5.

Obviously the reverse could happen. You would be discounted from the base rate for 2 years.

[CharlesElliott]

chriz1 said:

So like many my deals coming to an end in November
When searching price comparison sites I found one that says its a 2 year discounted deal but when I called the broker of this site they confused me and offered me another true fixed mortgage which was next cheapest and was £110 more a month. Obviously my main aim is to have cheaper monthly payments

So I'm confused what this discounted deal was and why they didn't advise gping with it ?

It was with Beverly on a 2 yr fixed or what I thought was

The other point is that there is discounted and a tracker. 'Discounted' usually means discounted from the lender's standard rate and whilst you would broadly expect this to go up and down with the base rate, it doesn't have to - and it could stay the same for a while if rates drop, or even go up more than the base rate.

A tracker tends to be similar, but directly linked to the base rate.

The reason your broker was probably steering you away from discounted is that rates are expected to rise a bit more, e.g. 0.5% this week, so the actual rate you could be paying might be more than the fix.

[chriz1]

Ah right thanks I get it now, think I will just fix and have the security at atm
Cheers for your help