Whether you are interested in buying your first home, second home or purchasing a buy to let property finding the best deal you can is most likely your priority. Once you sign for one you are most likely going to be locked into it for a number of years. Because of this it is wise to do your research and shop around at the claims of different providers before you commit to one, using the table above you can see what some of your different options may be for a mortgage.
To find out how much you may be able to borrow and what your repayments would be many lenders offer Mortgage Calculators. You need to remember however that it is only to give you an idea. The actual amount you can borrow will depend on other factors such as your credit history and current financial circumstances.
Different types of mortgage repayments
When considering any type of mortgage, aside from repayment or interest only, you need to think about what payment method would be best for you. Some of the different options include:
- Fixed Rate – With a Fixed Rate mortgage your interest payments are the same throughout the course of the deal, so you know how much you will be paying throughout it.
- Tracker – Tracker Mortgages are linked to the Bank of England’s base interest rate. This means that if the Bank of England either raises or lowers its base rate the interest you pay on your mortgage will also change to reflect this.
- Discount – Discount mortgages are similar to trackers but instead of your interest rate being reflective of the Base Rate it is affected by your lender’s specific Standard Variable Rate. The SVR is the rate many mortgages revert to once you move out of your introductory deal.
- Offset – This type of mortgage works by tying your savings to your mortgage. This usually means that you stop earning any interest on your savings instead the interest is used to offset your mortgage interest repayments. Lenders will allow you to either pay less each month, or to treat the difference as an overpayment, thus paying off your loan earlier.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. If you are at all unsure of the suitability of a particular product for your circumstances you should seek independent financial advice.