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
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.
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.
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.
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.
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.
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.
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
I do not offer this service but can refer you to a qualified professional in this area.