When you’re moving house, or buying a home, you will discover there are several different kinds of mortgages to choose from. The best mortgage deal for you will depend entirely on your individual circumstance. The main types of mortgage options are as follows:
Tracker mortgages track the Bank of England base rate, apply it, and add the additional set percentage rate from the lender. You can choose a tracker mortgage, as long as you can afford to accept that you will pay more when interest rates are high, so that you can benefit when they are low.
Fixed rate mortgages suit those who like to be disciplined with their monthly budgets, even if it means missing out on long periods of reduced interest rates. Essentially, a fixed rate mortgage means that your monthly payments are the same amount each month, regardless of what’s happening to the Bank of England base rate or the property market.
Often used as an incentive to persuade you to make an instant saving, discounted mortgages offer an upfront discount off the lender’s Standard Variable Rate (SVR). This is usually for the first few years of your mortgage deal, before it switched back to the SVR.
Capped mortgage allow your monthly repayments to fluctuate. The idea is that the rate can be capped so that it will never go above a certain limit. You may choose this mortgage option, if you think that mortgage rates will fall, so that you can capitalise on lower rates. However, at the same time, you may prefer to have the added protection of a cap, in-case they increase.
The idea behind an offset mortgage is to use your savings to reduce the amount of interest you pay on your mortgage overall. You can offset savings against your mortgage so that you only pay interest on a percentage of your mortgage deal.
Some lenders do allow you to ‘port’ your mortgage. Portable mortgages can be a swift transition from one property to the next. You will still have to re-apply and qualify but you could avoid some fees and charges. If you are moving into a bigger property which is worth more, you may not be entitled to borrow more, this will come down to a finncial assessment.
Our mortgage advisors are available Mon-Fri from 9am to 8pm, giving you plenty of opportunity to seek a quick overview of what your mortgage deal could potentially look like.
A dedicated team of mortgage experts will answer your questions, queries and provide quality advice for your personal circumstances and the specific mortgage product suited to you.
We’ll take care of your application to your chosen lender from start to finish, in record time. All for free.
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