Discount Mortgages

Discount rates are where the provider gives you a percentage of their standard variable rate. So as the Bank of England varies the base rate, which means the standard variable rate will move and so will your discount rate and hence your monthly payments will go up and down.

However please note, that if the Bank of England reduces the interest rate, this does not necessarily mean that the mortgage's standard variable rate will be reduced and therefore your discounted will not reduce as it is a discount on their standard variable rate.