There are many mortgage options available in the UK, each with different features, fees & eligibility.
I assess the options that are available to you and discuss, advise and recommend the most appropriate for your circumstances. Where I cannot advise, such as Equity Release, I refer to a qualified expert.
Some of the most typical mortgage options are:
FIXED RATE MORTGAGES
FIRST TIME BUYER
HOLIDAY LET
FURTHER ADVANCE
EQUITY RELEASE
TRACKER MORTGAGES
HELP TO BUY
OFFSET MORTGAGES
SECOND CHARGE
STANDARD VARIABLE RATE (SVR)
DISCOUNT MORTGAGES
BUY TO LET
RETIREMENT INTEREST ONLY
BRIDGING LOANS
Fixed Rate Mortgages
The interest rate stays the same for a set period of time, commonly two, three or five years.
This means that for every month during this set period, your mortgage repayments will remain the same.
Tracker Mortgages
A type of variable rate mortgage. The interest rate tracks the Bank of England base rate at a set margin, commonly a set percentage above it, therefore your mortgage payments can change.
You can be tied to a tracker rate for a number of years or not.
Discount Mortgages
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, again you can be tied in or not tied in to a penalty period.
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 or the rates for first time buyers.
Help to Buy Mortgages
The UK Government lends you a 20% deposit that is interest free for the first five 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. There are fees to come out of the scheme and the government can benefit from a rise in their equity share rather than you.
Help To Buy scheme is only available in Wales.
Buy to Let Mortgage
A mortgage secured on a property that is let out. The mortgage can be set up either as an individual mortgage or as a limited company one. 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 determined by the rental income the property will achieve rather than the applicant’s income. Maximum borrowing is generally up to 75% of the purchase price.
Holiday Let Mortgage
Is designed for people looking to borrow money to buy a property that will be let out on a short-term basis to tourists as a business.
Offset Mortgages
Allow you to use savings or current account balances to 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 held in the account.
Retirement Interest Only (RIO) Mortgages
An interest only mortgage with no set end date. It is designed to help borrowers who are looking for a lifestyle or retirement planning option, or who want to release equity, protect remaining equity and leave an inheritance for loved ones. Unlike Equity Release, affordable monthly interest payments prevent the interest being rolled up so that the equity can be preserved.
Further Advance
Taking on more borrowing from your current mortgage lender. This is typically at a different rate to your main mortgage. This route can make sense if: Your lender's further advance is competitive. You don't want to remortgage or switch lenders.
Second Charge Loans
Allows a second lender to lend against any remaining equity you have in your home, this is another loan secured against a property. It means you will have two mortgages on your property, with two different lenders.
For second charge mortgages we act as introducers only.
Bridging Loans
A type of short term, property backed finance with a higher rate of interest. They are often used to fund you for a short period of time, whilst allowing you to either refinance to longer term debt or sell a property. Bridging loans are usually offered for between 1-18 months, with the loan repayable in full at the end of the term.
Equity Release Mortgages
Equity release allows individuals aged 55 and over to release money from the property they live in without having to make any monthly repayments. Equity release can play a crucial role in retirement funding or planning an inheritance for loved ones. If you are thinking of taking out an equity release plan, then you need to find out as much as you can about your options and weigh up the advantages and disadvantages fully before you decide if equity release is right for you.
Equity release is a means of retaining use of a house or other asset which has capital value, while also obtaining a lump sum or a steady stream of income, using the value of the asset. It is also possible to make multiple withdrawals with equity release instead of just unlocking one big lump sum.
I do not offer this service but can refer you to a qualified professional in this area.
Standard Variable Rate (SVR)
A Standard Variable Rate (also known as Standard Mortgage Rate or SMR) is the standard interest rate offered by a mortgage lender. It’s the rate your mortgage reverts to after the end of the initial deal unless you chose another deal with the lender or remortgages to a new lender.
If you are experiencing financial difficulty and struggling to make repayments, then you can contact your lender who may be able to help taking account of your individual circumstances.
You may want to contact one of the free impartial money guidance and debt advice services such as StepChange, Citizens Advice, or Turn2Us.
If you are unable to meet your mortgage payments due to unexpected events (such as loss of income, ill health or damage/loss to your house or its contents) you are at risk of losing your home. There are insurance products available to protect you against these events – please ask us for more information.
For Insurance products we act as introducers only.
Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.
Mortgage Glossary
FIXED RATE
This is a mortgage where the interest rate is fixed at the start of the term for a period of years. During that time the monthly payment will not change providing you do not miss any of the payments or pay less than the amount due to the lender.
DISCOUNTED RATE
A discounted mortgage is a mortgage where the interest rate is set a certain amount below the lenders standard Variable Mortgage rate (SVR). This could be for either a set period or the whole of the mortgage term. The SVR is the interest rate set by your lender, which it can raise or lower by any amount, at any time. However, a discounted mortgage is a type of variable-rate mortgage meaning the amount you pay could change from month to month.
STANDARD VARIABLE RATE (SVR)
A standard variable rate (also known as Standard Mortgage Rate or SMR) – is the standard interest rate offered by a mortgage lender. It’s the rate your mortgage reverts to after the end of the initial deal unless you chose another deal with the lender or remortgages to a new lender.
INTEREST ONLY
When you take out an interest-only mortgage, your monthly payments pay back the interest on what you’ve borrowed, rather than the sum itself.
At the end of the term, you pay back the full amount outstanding in one lump sum.
EARLY REPAYMENT CHARGE (ERC)
This is a charge made by a lender if you repay all your mortgage or part of it before the date at which the initial deal ends. The amount of the charge can be found on your illustration and will vary depending on how early in the term you make the repayment.
PRODUCT TRANSFER
A product transfer mortgage is a remortgage with your current mortgage lender. It involves switching to a new mortgage deal with them when your current deal runs out.
ANNUAL PERCENTAGE RATE OF CHARGE (APRC)
APRC shows you, as a percentage, the annual cost of your mortgage over its lifetime. It brings together all the charges (such as fees) plus the interest rate on your initial deal and the interest rate you’ll be charged when your deal expires.
DEBT CONSOLIDATION
Debt consolidation is the act of taking out a single loan to pay off debts. You can use a secured or
unsecured loan for a debt consolidation.
TRACKER
A tracker mortgage is a type of variable rate mortgage. It follows the Bank of England base rate during a specified period, so your repayments can vary – go up or down.
The interest rate you pay on tracker mortgages is variable and is an agreed percentage above the Bank of England's base rate. As the base rate rises and falls, your interest rate will track these changes, and this will affect your monthly payments accordingly.
OFFSET
An offset mortgage is a type of mortgage that is linked to a savings account taken out with the lender. The money in your savings isn’t used to pay off your mortgage. Instead, it’s used to lower the total interest you’ll be charged on your repayments each month.
This can either make your mortgage repayments cheaper or reduce the term of your mortgage but, you won’t earn any interest on those savings your mortgage is ‘offset’ against.
Lenders ‘take away’ the amount in your savings account from how much you owe on your mortgage. You’ll only pay interest on what’s left.
REPAYMENT MORTGAGE (CAPITAL & INTEREST)
A capital and interest mortgage (often called a Repayment Mortgage) is the most common type of mortgage being offered at the moment. With this type of mortgage, you’ll make monthly How to present and confirm your mortgage advice 18 repayments for an agreed period of time (known as the ‘term’ of the mortgage) until you’ve paid back both the capital and the interest.
This means that the amount you owe will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid in full at the end of the term.
PORTING
This feature allows you to move the product you currently have over to a new property if you move house. The interest rates and monthly payments will remain the same after the house move although any additional money you borrow to purchase your new home will be subject to the rates and lending criteria available at the time you apply for the mortgage to be ported.
REMORTGAGE
Remortgaging is the transfer of a mortgage from one lender to another. You continue to live in the same house, but your monthly payments are made to a different lender. The purpose of Remortgaging is often to obtain a more favourable interest rate when your current deal has expired, but it may also be used to raise additional funds – for home improvements, to repay other debts etc.
LOAN TO VALUE (LTV)
LTV or Loan-to-Value is a ratio of the size of your mortgage loan compared to the value of the
property and expressed as a percentage.
GUARANTOR MORTGAGE
A guarantor mortgage (also known as a family-assisted mortgage) is a mortgage deal where another person agrees to take on responsibility for your repayments in the event that you can’t pay. That person is known as the ‘guarantor’ and is usually a family member or close friend of the mortgage applicant.