[Napid-devel] NUMBER ONE Success System

Tommy Lee noss1233 at gmail.com
Wed Aug 22 06:05:33 EDT 2007


The UK mortgage market is one of the most innovative and competitive in the
world. Unlike other countries there is no intervention in the market by the
state or state funded entities and virtually all borrowing is funded by
either mutual organisations (building societies and credit unions) or
proprietary lenders (typically banks). Since 1982, when the market was
substantially deregulated, there has been substantial innovation and
diversification of strategies employed by lenders to attract borrowers. This
has led to a wide range of mortgage types.

As lenders derive their funds either from the money markets or from
deposits, most mortgages revert to a *variable rate*, either the
lenders *standard
variable rate* or a *tracker rate*, which will tend to be linked to the
underlying Bank of England (BoE) repo rate (or sometimes LIBOR). Initially
they will tend to offer an *incentive deal* to attract new borrowers. This
may be:

   - A *fixed rate*; where the interest rate remains constant for a set
   period; typically for 2, 3, 4, 5 or 10 years. Longer term fixed rates (over
   5 years) whilst available, tend to be more expensive and therefore less
   popular than shorter term fixed rates.
   - A *capped rate*; where similar to a fixed rate, the interest rate
   cannot rise above the *cap* but can vary beneath the cap. Sometimes
   there is a *collar* associated with this type of rate which imposes a
   minimum rate. Capped rate are often offered over periods similar to fixed
   rates, e.g. 2, 3, 4 or 5 years.
   - A *discount rate*; where there is set margin reduction in the
   standard variable rate (e.g. a 2% discount) for a set period;
   typically 1 to 5 years. Sometimes the discount is expressed as a margin over
   the base rate (e.g. BoE base rate plus 0.5% for 2 years) and sometimes
   the rate is stepped (e.g. 3% in year 1, 2% in year 2, 1% in year

A *cashback* mortgage; where a lump sum is provided (typically) as a
percentage of the advance e.g. 5% of the loanThere are no profit making
benefits of any kind associated with this activity. No benefit or return of
any nature is expressed or implied and no promises or guarantees of any such
return are permitted to be made by any participant of this activity.
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