Finding exactly what’s best for youTypes of Mortgages
The type of mortgage you need will be dependent on your circumstances and the property you intend to purchase, but there may then also be a range of mortgage products from which you can choose.
Types of Mortgage
Fixed rates, variable rates and more…
The difference between these generally relates to how the actual interest rate is calculated and/ or how long it will apply. Here is our guide to the main types on offer
Fixed Rate Mortgages
These are pretty straight-forward in the sense that, it is of a fixed interest rate for a fixed period, which won’t change within that time, so it won’t be affected by the Bank of Englands rate changes.
The rate offered may be higheror lower than the lenders standard variable rate, but there is obviously reassurance in knowing exactly what your repayments are going to be for that set period of time, regardless of what the Bank of England decide.
Variable Mortgages come in a variety of guises, the common factor being that the interest rate can change at any time. The most common variable products are:
Standard Variable Rate (SVR) Mortgages – these are set at the base rate used by the lender but can increase or decrease in line with any changes to the Bank of England base rate. Standard Variable rate can apply for the lifetime of the mortgage or until a new deal is taken.
Discount Mortgages – these offer a discount from the lender’s SVR for a specified time period, usually between 1 and 3 years. Since SVR’s vary from lender to lender, the highest discount doesn’t always correspond to the lowest rate on offer.
Tracker Mortgages – these are generally offered at a few percent above the Bank of England base rate and this set rate then increases and decreases in line with any changes to that bank rate. Tracker products will have a defined time period which is generally anything from 1 to 5 years.
Capped Rate Mortgages – these move in line with the Standard Variable Rate, decreasing by and increasing by the same value but never exceeding the specified capped rate.
Offset Mortgages – these are an entirely different proposition altogether, linking the mortgage to the borrower’s savings and current accounts. Interest is only paid on the difference between the two, meaning that any savings are effectively acting as an overpayment.
Choosing the Best Deal
Scouring the whole of the market to find the best mortgage products for you
With access to the entire market, we have no limitations when it comes to finding just the right mortgage product, including:
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.
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