Types of Mortgage
Find the Right Mortgage for You – Tailored Advice and Clear Choices
The UK mortgage market offers a wide range of products, each designed to meet different customer needs. Our experts will guide you in choosing the best mortgage for your specific situation.
A wide variety of mortgage products to suit your needs. Our expert mortgage advisers will walk you through the key features of different mortgage types, helping you identify what matters most to you. For example, do you want fixed monthly repayments or the ability to make overpayments? By answering these questions, we can recommend the mortgage product that best suits your needs.
Mortgage Products
There are three primary types of mortgage products, each with distinct features. Read on to learn more about each one:
1. Variable Rate Mortgage
A variable rate mortgage has an interest rate that can fluctuate based on the lender's decisions. There is no set limit on how often the rate can change, which means your monthly payments could rise or fall during the loan term.
2. Discount Mortgage
A discount mortgage offers a variable rate discounted from the lender's standard rate for an initial period. Although interest rates can fluctuate during the discount period, the discount itself remains the same. Once the discount ends, the mortgage will revert to the lender’s Standard Variable Rate (SVR). This type of mortgage provides reduced payments in the early years of your loan.
3. Fixed Rate Mortgage
As the name suggests, a fixed rate mortgage offers an interest rate that stays the same for a set period. Once the fixed-rate period ends, the mortgage will revert to the lender's SVR. Fixed-rate mortgages are ideal for those who prefer predictable monthly payments, providing peace of mind and financial stability.
"We help you choose the mortgage that fits your needs."
Methods of Repayment
There are two main methods for repaying your mortgage, each with its own benefits:
1. Capital & Interest Mortgage (also known as a capital repayment mortgage)
With this type of mortgage, you repay both the capital (loan principal) and interest each month over an agreed term. At the end of the mortgage term, the loan is fully repaid.
2. Interest-Only Mortgage
With an interest-only mortgage, you only pay the interest on the loan during the mortgage term. The principal (capital) remains unchanged until the end of the term when you must repay the full amount. It is crucial to ensure that your repayment vehicle will allow you to pay off the principal when due.
Please note, this method does not guarantee that the mortgage will be fully repaid at the end of the term, so it is essential to have a suitable repayment plan in place.
3. Part Capital & Part Interest Mortgage
A hybrid of the two previous methods, this option allows you to repay part of the capital and interest each month. This option is ideal if you already have an existing investment product or if you anticipate a shortfall in your endowment maturity.
Our mortgage advisers are happy to discuss the best mortgage product and repayment method for your situation. Contact us to get expert advice and answers to all your questions.
Contact us today at 01392 927327 or complete our Online Enquiry Form to get started.
