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Low Start Mortgages
Some mortgage lenders have labelled discount mortgages and deferred rate mortgages as low start mortgages. However for the purposes of this mortgage guide the low start mortgage is a combination of a repayment mortgage and an interest only mortgage, although some lenders will have a different description of the low start mortgage.
Low start mortgages are ideally suited to first time buyers with little money available to them at the start of the mortgage term. During an introductory period of the mortgage you pay only the interest payments each month. Once this introductory period ends you then begin to pay both the interest charges and the outstanding mortgage capital.
This means that your monthly repayments will be larger than they would be if you were paying a repayment mortgage from the start of the mortgage term because you will not have repaid any of the capital. For this reason low start mortgages are especially suited to borrowers who expect to experience a large increase in income over the course of their mortgage term.
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