This loan offers fewer features and flexibility than a standard variable loan however this is offset by providing borrowers with lower interest rates. If you require extra flexibility within this type of loan, you often have the option to pay for any additional features required, although this will depend on the loan provider. Interest rates and repayments will vary throughout the loan term.
Advantages:
- Lower interest rates than the standard variable loans.
- Lower repayments.
- If interest rates fall, your repayments will fall.
Disadvantages:
- Usually less flexibility than other variable loans.
- Offer less features.
- If interest rates rise your repayments will rise.