A discount rate mortgage offers a percentage discount from the lender's normal variable rate for a set period of time.

When the standard variable rate fluctuates, the discount will remain fixed, however, the amount of discount and the period will vary from deal to deal.

Discount mortgages are more suitable for people who prioritise low initial payments at the expense of higher rates later on; for example first time buyers, whose income isn't so high who want to have some spare cash to spend on furnishing their new home.

The discount rates last from six months to about five years and generally the shorter the period of discount, the higher the discounted rate will be.

In addition, you should consider that sometimes lenders can attach redemption penalties for remortgaging after your discounted period has ended.