Mortgage options

IF YOU ARE not in the fortunate position of being able to buy your home entirely in cash, finding the right property is only half the battle. The other half is choosing the best type of mortgage for your specific requirements.

When you’re looking for a mortgage, the first thing you need to do is consider what kind of mortgage is right for your situation. There are many different types of mortgages available so you’ll need to take into account your financial situation, your job security and your future plans when choosing a mortgage. You should also compare different mortgages to find the best deal for you.

YOUR OVERALL MONTHLY PAYMENTS
The interest rate on your mortgage will also have an impact on your overall monthly payments. We can help you compare interest rates from different lenders so you get the right deal for your needs. The term of your mortgage, which is the length of time over which you’ll have to repay the loan, is important. You should choose a term that is comfortable for you, but be aware that longer terms will usually result in higher interest rates.

For most mortgages you’ll need to put down a deposit of at least 5%. This is important because the size of your deposit will affect the interest rate you’re offered and the amount you’ll need to borrow.

MAKE AN INFORMED DECISION
Choosing the right type of mortgage is incredibly important – and getting it wrong
can cost you a lot of money. Narrowing down the mortgage type that is best suited to your finances will ensure you choose a lender and a mortgage product that meet your requirements.

Your mortgage lender will want to know about your income, your debts and your financial goals. You’ll need to be honest about your situation so that the lender can make an informed decision to offer you the right mortgage deal. Your mortgage should also fit into your long-term plans. If you’re planning on selling your property or moving to a new one, you might want to consider a shorter mortgage term.

SO WHICH TYPE OF MORTGAGE IS RIGHT FOR YOU?
It depends on your individual circumstances and what’s important to you. There are a number of different types of mortgage available, so it’s important to choose the right one for your individual requirements.

HERE’S A BRIEF OVERVIEW OF THE DIFFERENT TYPES OF MORTGAGE
Standard Variable Rate (SVR) mortgage: A SVR mortgage means your interest rate can go up and down over time, and your monthly payments can vary. The variable rate you are on will be set by your lender and won’t necessarily always rise or fall in line with changes to the Bank of England base rate.

Fixed rate mortgage: With a fixed rate mortgage, the interest rate is fixed for an agreed period of time, typically 2 to 5 years. This gives you certainty over your monthly repayments during that period, but after that the rate will usually revert to the lender’s SVR.

Tracker mortgage: A tracker mortgage tracks the Bank of England base rate plus a margin set by the lender. So if the base rate changes, your repayments will change too. Tracker rates are often only available for a limited period, typically 2 to 5 years.

Discounted rate mortgage: A discounted rate mortgage gives you a discount off the lender’s SVR for an agreed period of time, typically 1 to 5 years. After that the rate will usually revert to the SVR.

Capped rate mortgage: A capped rate mortgage offers you a maximum interest rate for an agreed period of time, after which the rate will revert to the lender’s SVR. This can give you some protection against rising interest rates.

Offset mortgage: An offset mortgage allows you to offset your savings against your mortgage balance, so you only pay interest on the net amount. Offset mortgages tend to have higher interest rates than other types of mortgage.

Don’t forget, our professional friendly advisers are on hand to support you and can help you explore all of your options.