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Help understanding morgage intrest rates

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  • Help understanding morgage intrest rates


    I am a new member here and was looking for advise on how to understand morgage intrest rates, for example on a three year fixed morgage with nationwide you have:

    The initial rate in this example 5.19% ( I asumme this is the intrest rate for the first three years.)

    Then you have SMR with is 3.99%

    Then you have Overall cost for comparison 4.5% APR, is this the current rate? For example going by current prices this is what you would pay after three years?

    Thanks in advance.

  • #2
    Re: Help understanding morgage intrest rates

    The 5.19% rate is the rate you will pay for the first three years.

    The 3.99% rate is the lenders current variable rate (probably 3.49% above bank of england base rate)

    The 4.5% rate is a composite of the 2 purely so that you can compare different lenders offerings.

    N.B. The 3.99% rate will probably never materialize since, as previously mentioned, this is linked to the bank of england base rate which is extremely unlikely to be at 0.5% in three years time
    Adam Long



    • #3
      Re: Help understanding morgage intrest rates

      thanks mate


      • #4
        Re: Help understanding morgage intrest rates

        Hello Friends...........

        Understanding home mortgage interest rates requires some knowledge of financial vocabulary, how interest rates are determined and who is responsible for making that determination. It also helps to know why interest rates fluctuate and how to calculate a mortgage payment, not including taxes, insurance, and other potential increases to your final payment amount that all lenders are obligated to disclose to you in writing.