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Best Discounted Variable Rate Mortgages

Discounted variable rate mortgages offer a discount on a certain interest rate, most commonly a lender's standard variable rate. The discount can be for an introductory term of two, three or five years, or it could even be for the entire term of the mortgage (a lifetime discounted rate).

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Best Discounted Variable Rates

Best Discounted Variable Rates

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We found 168 products in total, of which 0 have links to providers.

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  • Progressive BS Discounted Variable
    Rate
    4.84%
    4.84% Discounted Variable (collared at 2.00%) for 2 years (3.90% disc)
    reverting to 8.74%
    APRC
    8.2%
    Max LTV
    75%
    Product Fees
    £0.00
    Initial Payment
    £1,254.17
    Total Over
    Speak To A Broker
  • Reliance Bank Discounted Variable
    Rate
    4.85%
    4.85% Discounted Variable to 31/10/2026 (2.65% disc)
    reverting to 7.50%
    APRC
    7.2%
    Max LTV
    75%
    Product Fees
    £1,094.00
    Initial Payment
    £1,255.43
    Total Over
    Speak To A Broker
  • Newbury BS Discounted Variable
    Rate
    4.89%
    4.89% Discounted Variable for 3 years (2.11% disc)
    reverting to 7.00%
    APRC
    6.6%
    Max LTV
    75%
    Product Fees
    £850.00
    Initial Payment
    £1,260.47
    Total Over
    Speak To A Broker
  • Newbury BS Discounted Variable
    Rate
    4.89%
    4.89% Discounted Variable for 3 years (2.11% disc)
    reverting to 7.00%
    APRC
    6.6%
    Max LTV
    65%
    Product Fees
    £850.00
    Initial Payment
    £1,260.47
    Total Over
    Speak To A Broker
  • Furness BS Discounted Variable
    Rate
    4.99%
    4.99% Discounted Variable (collared at 3.00%) for 2 years (3.70% disc)
    reverting to 6.75% Discounted Variable
    APRC
    7.8%
    Max LTV
    80%
    Product Fees
    £999.00
    Initial Payment
    £1,273.14
    Total Over
    Speak To A Broker
  • Progressive BS Discounted Variable
    Rate
    5.14%
    5.14% Discounted Variable (collared at 2.00%) for 2 years (3.60% disc)
    reverting to 8.74%
    APRC
    8.3%
    Max LTV
    60%
    Product Fees
    £0.00
    Initial Payment
    £1,292.25
    Total Over
    Speak To A Broker
  • Loughborough BS Discounted Variable
    Rate
    5.15%
    5.15% Discounted Variable (collared at 3.50%) for 3 years (2.79% disc)
    reverting to 7.94%
    APRC
    7.4%
    Max LTV
    95%
    Product Fees
    £999.00
    Initial Payment
    £1,293.53
    Total Over
    Speak To A Broker
  • Reliance Bank Discounted Variable
    Rate
    5.25%
    5.25% Discounted Variable to 31/10/2026 (2.25% disc)
    reverting to 7.50%
    APRC
    7.2%
    Max LTV
    75%
    Product Fees
    £99.00
    Initial Payment
    £1,306.36
    Total Over
    Speak To A Broker
  • Suffolk Building Society Discounted Variable
    Rate
    5.25%
    5.25% Discounted Variable for 2 years (3.44% disc)
    reverting to 6.95% Discounted Variable (collared at 3.00%)
    APRC
    7.9%
    Max LTV
    80%
    Product Fees
    £1,198.00
    Initial Payment
    £1,306.36
    Total Over
    Speak To A Broker
  • Progressive BS Discounted Variable
    Rate
    5.25%
    5.25% Discounted Variable (collared at 2.00%) for 2 years (3.49% disc)
    reverting to 8.74%
    APRC
    8.3%
    Max LTV
    75%
    Product Fees
    £0.00
    Initial Payment
    £1,306.36
    Total Over
    Speak To A Broker
Representative Example
Note

Mortgage Advice Bureau offers fee free mortgage advice for Moneyfacts visitors that call on 0808 149 9177 or email moneyfacts@mab.org.uk. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%.

Any contractual relationship will be with Mortgage Advice Bureau.

Disclaimer

Credit will be secured by a mortgage on your property. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE. Written quotations are available from individual lenders. Loans are subject to status and valuation and are not available to persons under the age of 18. All rates are subject to change without notice. Please check all rates and terms with your lender or financial adviser before undertaking any borrowing

Provider Links

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Discounted variable rate mortgages explained

How does a discounted rate mortgage work?

A discounted rate mortgage uses a variable interest rate – so your payments can go up and down. They work by offering a set discount on a lender's Standard Variable Rate (SVR). So, if the lender's SVR is currently 4.00% and the discounted rate offers a 1.00% discount, you'll initially pay 3.00% for an agreed introductory period.

Then, if the SVR goes up to 5.00% later, your discounted rate would go up to 4.00%. If the SVR goes down by 1.00%, your discounted rate would also go down by 1.00%. To find out when a lender may increase or decrease their SVR (and therefore any discounted rates linked to it), see our SVR guide.

When your introductory period comes to an end, you will most likely move onto your lender's full SVR. Discounted rates tend to come with an early repayment charge, if you pay off the mortgage early or remortgage to another lender during the introductory period. However, most will let you make overpayments – normally up to 10% of the outstanding balance per year.

If you have a lifetime discounted mortgage, the early repayment charge will probably not apply for the full term of the mortgage, but only for an initial two to five-year period (depending on your lender).

Although discounted mortgages may sound like a good deal, they're not necessarily the cheapest mortgage rates available. For example, you may be able to find a cheaper tracker mortgage. Remember: discounted mortgages have variable rates, which means you won't get the same payment security as you do with a fixed rate.

Should I speak to a mortgage broker?

Mortgage brokers remove a lot of the paperwork and hassle of getting a mortgage, as well as helping you access exclusive products and rates that aren’t available to the public. Mortgage brokers are regulated by the Financial Conduct Authority (FCA) and are required to pass specific qualifications before they can give you advice.

 

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Call 0808 149 9177 or request a callback

Mortgage Advice Bureau offers fee free mortgage advice for MoneyfactsCompare visitors that call on 0808 149 9177. If you contact Mortgage Advice Bureau outside of these channels you may incur a fee of up to 1%. Lines are open Monday to Friday 8am to 8pm and Saturday 9am to 1pm excluding bank holidays. Calls may be recorded.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Some discounted mortgage rates can only go so low

Collar rates are becoming more common since interest rates hit all-time lows. These basically mean that the mortgage rate, and therefore your mortgage payments, can only go so low. This lower limit is called the collar.

So, if a lender’s SVR was reduced to a level that sent the discounted mortgage below the collar, your payments would not go any lower than the collar rate.

Pros and cons of discounted mortgages

  • When interest rates are low your repayments will be lower.
  • Discounted rates can have quite low mortgage arrangement fees in comparison to a fixed rate or tracker.
  • Your interest will track against your lender’s SVR, meaning if this increases so does your monthly payment.
  • If interest rates go up, so will your payments. An increase of just 1% could add an extra £83 a month to your repayments for a £100,000 mortgage.
  • Although they have the word "discount" in the title, discounted mortgages may not be the cheapest rates on offer.
  • Some discounted rate mortgages have an interest rate collar, which means that your payments cannot go below a certain point.

Mortgage calculator

Our mortgage calculator helps you to see how much your mortgage might cost you each month.

Our how much can I borrow calculator gives you a range of how much a lender might consider lending you under a mortgage. This calculation is only an indication only.

 

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