There are lots of mortgages to choose from, which can make the decision rather difficult. Our agents work with the best mortgage advisors in the West Midlands to ensure you make the right decision. Here are all the options available to you in the UK:
What are the different types of mortgages?
Fixed rate: have an interest rate that will stay the same throughout a set period. Popular options are two-year or five-year fixed-rate mortgages, but it is possible for a term to last 10 years or more.
Offset: lets you use your savings against the amount owed on your mortgage, which reduces how much interest you pay. Your savings are deducted from the outstanding mortgage, so you’ll pay interest on what’s left. Offset mortgages work very well if you pay more in mortgage interest than the amount you earn in your savings account.
Tracker: usually charge you an interest rate in line with the Bank of England (BoE)'s base rate, but usually tracks a few percent higher. The base rate is the interest rate at which high street banks borrow money. As it goes up and down, your monthly repayments will rise and fall too.
Standard variable rate: come with an interest rate set by your mortgage lender, and is also usually a few percentage points above the BoE’s base rate. If you are on an SVR mortgage, you have a high chance of paying more than you need to. Switching to a fixed-rate or tracker-rate deal will save you money and you shouldn’t have to pay an early repayment charge.
Interest-only: you only pay the monthly interest charged on the loan. You don’t have to repay the amount you’ve borrowed, the ‘capital’, until the end of the agreed term. Your monthly payments are smaller than when on a repayment mortgage, but you’ll make provisions to pay back the original loan.
Discounted variable rate: similar to a tracker mortgage but, rather than being linked to the BoE base rate, it’s linked to your lender’s standard variable rate. A DVR mortgage will be set at a fixed percentage below your broker/lender’s SVR and can change at your their discretion.
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