Helping You Find The Right Mortgage
We want to help you with the mortgage you are most comfortable with. There are several different types of mortgage available. Your circumstances and priorities will determine which one is right for you. If you're on a fixed salary then a fixed monthly payment might be best; while if you receive a basic salary plus large bonuses, you may prefer greater payment flexibility. You can also repay your mortgage in different ways - repayment, interest-only or a combination of both. As each person's circumstances are different, so is each solution. But don't worry – we've got them all!
Variable-rate mortgagesThere are two main types of variable-rate mortgage: tracker mortgages and discount mortgages.
With a tracker mortgage, your interest rate 'tracks' the Bank of England base rate (currently 0.25%) for either a set period of time such as two years or sometimes for the life fo the mortgage term.
With a discount mortgage, you pay the lender's standard variable rate, with a fixed amount discounted. For example, if your lender's standard variable rate was 4% and your mortgage came with a 1.5% discount, you'd pay 2.5%. Discounted deals can be ‘stepped’; for example, you might take out a three-year deal but pay one rate for six months and then a higher rate for the remaining two-and-a-half years. Some variable rates have a 'collar' – a rate below which they can’t fall – or are capped at a rate that they can’t go above. Make sure to look out for these features when choosing your deal to ensure you understand what you're signing up to.
With fixed-rate mortgages, you pay the same interest rate for a set period of time, regardless of interest rate changes elsewhere. These can help provide stability of payments and some security.
Standard variable rate mortgages
Each lender has its own standard variable rate (SVR) that it can set at whatever level it wants – meaning that it's not directly linked to the Bank of England base rate. This is higher than most mortgage deals currently on the market, so if you're currently on an SVR, it's worth shopping around for a new mortgage. If you're still in the initial deal period of your mortgage, make a note of when it's due to end, and consider remortgaging at that point to avoid being moved on to your lender's SVR and paying more than you need to.