Business and Personal Finance Dictionary

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• LOW START MORTGAGES
  
  In the competitive environment among home lenders, there are a variety of offers which promise a discount off the prevailing variable interest rate . In other words, the interest rate on offer is set at a set margin below the standard variable rate. This 'discount' may be for a number of years, but in some cases lenders have offered big discounts for short periods of time. e.g. 6% off your home loan rate for six months. These offers are, in a sense 'too good to be true'. They invariably involve the borrower agreeing to stay with the lender for a period of time or face 'withdrawal penalties'. Other options include mortgages which are : variable rate , fixed rate or capped.
  
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