 Sam
Site Admin
Joined: 21 May 2005
Posts: 286
Location: CALIFORNIA
120.31 Dollars($)
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 Posted: Thu Jun 03, 2004 4:37 am Post subject: Drop Lock Mortgage |
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Drop Lock Mortgage is a discount or a tracker mortgage product.It has following characteristics:- It has an option to switch to a fixed rate, at any point within the initial discount period, without paying an early repayment charges.
- It provides an ideal way to benefit from base rates when they are low.
For example, Jack has taken a drop lock mortgage of $600,000 at a variable rate of 5% for his house renovation. His initial discount period is until june-2004. Jack wants to switch to a fixed rate of interest of 4% from a variable rate of interest of 5%. By drop lock mortgage he may switch to a fixed rate of interest within the initial discount period. No repayment penalties are charged from him. |
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