2nd October 2025
Fixed-rate mortgages have long been the go-to choice for borrowers - and with good reason. But as the market evolves, discounted deals can be a compelling alternative for the right borrower.
At the Vernon, we understand why many homebuyers gravitate toward fixed-rate mortgages. The psychological comfort of predictable monthly payments is a powerful motivator, and brokers know this well.
However, while fixed rates provide predictability, discount mortgages deserve serious consideration - especially for borrowers who value flexibility. In the right circumstances, they can offer a smart alternative.
As noted, one of the main drawbacks of a variable rate mortgage is its unpredictability. Following the post-COVID base rate increases, this concern is entirely valid. When interest rates were low, the cost difference between fixed and variable products was less noticeable, making the security of fixed payments worth the slight premium for most borrowers.
Comparatively lower initial rates have often been a hallmark of discount mortgages - something brokers are well aware of. Yet there’s another key advantage that’s often overlooked: flexibility.
One of the standout benefits of our discount mortgage range is the freedom it offers borrowers to manage their repayments more proactively. They allow borrowers to make overpayments of up to 25% per year without incurring ERCs, compared to just 10% on our fixed-rate options.
This enhanced overpayment ability can be especially valuable for borrowers who expect access to lump sums - whether through inheritance, the sale of assets, or irregular income. It’s also ideal for those simply aiming to pay off their mortgage faster.
Additionally, the flexibility of a discount mortgage can be an attractive proposition for borrowers who may wish to exit their mortgage before the end of the term, or who anticipate benefiting financially from switching to a new product early due to positive market movements - whether expected or unexpected.
Admittedly, a discounted mortgage may not suit every borrower. While there are certainly scenarios where it won’t be the most appropriate option, there are also many cases where the flexibility it offers can be highly advantageous. As market conditions evolve, discounted mortgages are playing an increasingly prominent role in the advice process - highlighting the importance of tailoring recommendations to individual borrower needs.
At the Vernon, every case is personally underwritten, ensuring your clients’ individual circumstances are fully understood and reflected in the solutions we offer. Our discount mortgage products are designed with flexibility in mind, providing brokers with valuable options in a shifting market where tailored advice matters more than ever. We’re committed to delivering a responsive, broker-focused service that puts you and your clients' needs first, with clear communication, fast decisions, and a team that’s always ready to support you. Whether it’s navigating a complex case or exploring the benefits of our discount range, we’re just a phone call away - ready to help you deliver the best possible outcomes for your clients.
Phone: 0161 429 4327