There are many mortgage options available in the UK, all with different features, fees & eligibility.
We assess all the mortgage options available to you and discuss, advise and recommend the most appropriate for your circumstances.
Here is an overview of the some of the most typical or popular mortgages.
Fixed Rate Mortgages
With a fixed rate mortgage, the interest rate stays the same for a set period of time. This means that for every month during this set period, your mortgage repayments will remain the same.
A tracker mortgage is a type of variable rate mortgage. The interest rate tracks the Bank of England base rate at a set margin (for example, 1%) above or below it.
A discount mortgage is a type of variable rate mortgage. The term ‘discount’ is used because the interest rate is set at a certain ‘discount’ below the lender’s standard variable rate (SVR) for a set period of time.
First Time Buyer Mortgages
If you have not previously owned a property you are classed as a first time buyer. Some lenders offer discounts on the fees and rates to first time buyers.
Help to Buy Mortgages
UK government lend you a 20% deposit that is interest free for the first 5 years. This is an equity loan based on the value of the property. You put in a 5% deposit from your own money and take out a mortgage for the remaining 75%. This means you benefit from having a 25% deposit and get a better rate of interest from the lender.
Buy to Let Mortgages
A buy to let mortgage is a mortgage secured on a property that will let out. The mortgage can be set up either as an individual mortgage or as a limited company for tax efficiency. When compared to a main residence mortgage you will find that the mortgage rates and fees are typically higher on a buy to let mortgage.
Typically the mortgage is based on the rental income the property will achieve generally up to 75% of the purchase price.
Offset or Flexible Mortgages
Offset mortgages allow you to use savings or current account balances you hold to help reduce the overall interest you pay on your mortgage, this can either help reduce the overall term of the mortgage or reduce your monthly payments. Funds held in either the current account or savings account can be withdrawn at any time and there generally in no maximum to the amount that can be helf in the account.
Equity Release Mortgages
Equity release is, in a nutshell, a way to unlock the value of your property and turn it into a cash lump sum. You can do this via a number of policies which let you access – or 'release' – the equity (cash) tied up in your home, if you're 55+. You don’t need to have fully paid off your mortgage to do this.
As a rule, you can take the money you release in one lump sum, in several smaller amounts on which you'll pay interest, or as a combination of both.
Paul Snook would love to hear from you with any questions you might have, as there are many options and great care is needed when choosing the right one for you.