A hybrid mortgage gives borrowers a fixed rate period,\u00a0followed by a\u00a0discount period.\u00a0With a typical hybrid deal,\u00a0at the end of its two-year fixed rate period\u00a0\u00a0the mortgage\u00a0would move to a discounted rate (1% below the lender’s\u00a0standard variable rate (SVR) for a further period (usually three years). In effect,\u00a0giving the borrower a lower rate for a longer period,\u00a0as opposed to reverting to the lenders SVR\u00a0at the end of the fixed-term,\u00a0until\u00a0they\u00a0remortgage or pay off the loan.<\/p>\n
Currently, hybrid mortgages make up 4% of the mortgage market and are only available from limited lenders.<\/p>\n
When comparing these hybrid mortgages to a standard two-year fixed rate, borrowers might be better off opting for the latter and remortgaging at the end of the term, as initial rates from larger banks and building societies are often lower than the discounted rates offered by smaller lenders.\u00a0 Indeed, borrowers looking for longer-term security might do the maths and consider a five-year fixed rate a better option.<\/p>\n
For some, choosing a hybrid mortgage could mean\u00a0deferring\u00a0remortgaging for five years.\u00a0The\u00a0discounted rate will still be less than their lenders\u00a0SVR when\u00a0the mortgage\u00a0reverts\u00a0after the fixed term, which\u00a0could be advantageous\u00a0if they are\u00a0planning on selling within a few years\u00a0and want to\u00a0avoid the hassle of remortgaging.<\/p>\n
Whether\u00a0choosing a\u00a0fixed, variable or hybrid\u00a0mortgage,\u00a0borrowers are encouraged to do their\u00a0research to find a deal that best suits their circumstances, and if in doubt\u00a0take\u00a0expert advice.<\/p>\n","protected":false},"excerpt":{"rendered":"
Borrowers\u00a0are usually\u00a0faced with\u00a0the choice of\u00a0a fixed or variable rate mortgage, but\u00a0some\u00a0lenders do offer mortgages that are a mixture of both \u2013 a hybrid mortgage\u00a0\u2013\u00a0which\u00a0do\u00a0on the face of it\u00a0give borrowers access to lower interest rates. A hybrid mortgage gives borrowers a fixed rate period,\u00a0followed by a\u00a0discount period.\u00a0With a typical hybrid deal,\u00a0at the end of its two-year… Read more »<\/a><\/p>\n","protected":false},"author":3380,"featured_media":16026,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[26],"tags":[],"acf":[],"_links":{"self":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/5023637"}],"collection":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/users\/3380"}],"replies":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/comments?post=5023637"}],"version-history":[{"count":0,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/posts\/5023637\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media\/16026"}],"wp:attachment":[{"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/media?parent=5023637"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/categories?post=5023637"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.buyassociationgroup.com\/en-gb\/wp-json\/wp\/v2\/tags?post=5023637"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}