This is a very brief guide to show the different types of mortgages that are available depending on your needs, circumstances and preferences. Nothing stated here should be taken as professional advice or recommendation. Please fill in the enquiry form so you can receive personalised advice.
| Do you need the security of fixed mortgage payments over a certain period ? | |
| YES A fixed rate mortgage might be suitable for you. With a fixed rate mortgage the mortgage lender fixes the interest rate owed on your loan for a set period of time, usually between one and five years. After that it normally reverts to the lender's standard variable rate but you should consider remortgaging. |
NO A variable or tracker mortgage might be suitable for you. The interest rate on a variable, capped rate, discounted or tracker mortgage is not fixed. Your mortgage goes up or down in line with a pre-determined rate (Bank of England base rate or lenders standard variable rate) |
| Do you have savings? | |
| YES An offset mortgage might be suitable for you. An offset mortgage allows you to offset your savings against the amount you owe on your mortgage which will reduce your mortgage payments. |
NO You may not need a mortgage with offset features. If you don't have enough for a down payment deposit you might need to get a 100% mortgage (This is offered by a few lenders and may attract lender fees) |
| Do you want to own the house outright at the end of the mortgage term? | |
| YES A repayment mortgage might be suitable for you. A repayment mortgage guarantees to pay off your mortgage debt by the end of the term. It comes with higher monthly payments than an interest-only mortgage because you are paying off the capital borrowed, along with the interest. |
NO You might consider an interest-only mortgage. Repayments are cheaper on an interest-only mortgage but at the end of the term you will still owe the capital you borrowed – meaning that if you haven't set up some kind of repayment vehicle (e.g. an endowment or ISA) you might need to sell your property to pay off the amount that you borrowed. |
| Do you want to be able to make over and under-payments? | |
| YES You might consider a flexible mortgage. Flexible mortgage enable you to make over and underpayments and take mortgage payment holidays. This could be useful if you are self-employed, get an annual bonus or your income fluctuates. |
NO You might not consider a mortgage with any flexible features. |
| Can you prove what you earn? | |
| YES You may be eligible for a full status mortgage. |
NO You might need a self-certified mortgage. With self-cert mortgages you have to declare what you earn but not prove it. Self-cert mortgages are suitable for self-employed people or those with several income streams. |
| Have you had credit problems in the past? | |
| YES You might need an adverse credit mortgage or sub prime mortgage. Having past credit problems makes getting a mortgage more difficult but not impossible – you may have to pay a higher interest rate. |
NO You may consider a mainstream mortgage |
| Are you planning to rent out the property? | |
| YES You need a buy-to-let mortgage. Buy-to-let mortgages are for people who want to buy a property to rent it out. The amount you can borrow will be based on the rent you can get for the property rather than your income. |
NO You may opt for a residential mortgage. |
| Do you want to re-mortgage your current home to rent it out? | |
| YES You need a let to buy mortgage. Let to buy mortgage enables you to mortgage/remortgage your home and than rent it out. |
NO You should get a residential re-mortgage. |
| Are you likely to move house shortly after taking out a mortgage? | |
| YES A portable mortgage might be more suitable to you. A portable mortgage enables you to transfer your existing mortgage to your new property. You can also opt for a mortgage with no early redemption penalties. |
NO A mortgage with early redemption penalties shouldn't be a problem although you will have to pay the lender a penalty charge if you want to remortgage before your fixed term or locked-in period expires. |
| Have you got a deposit? | |
| YES Depending on how much deposit you have, you will be eligible for most mortgage deals. Please note that most lenders require minimum of 5 % deposit and usually, if you have a large deposit, lenders will offer better deals. |
NO Only 100% mortgages available in the UK mortgage market are designed to help young people get on the property ladder. These mortgages are only offered if a parent or a guardian agrees to be a guarantor. |
| Will your parent/s and or Guardian/s be able to guarantee your mortgage payments? | |
| YES A guarantor mortgage might be suitable to you. This is where your parent/ guardian will take responsibility for your payments if you default. Some lenders are still willing to lend 100 % under this scheme. |
NO You may opt for a mainstream mortgage. |