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DIFFERENT TYPES OF MORTGAGE

There a several different types of mortgage on the market today but not all types are suited to every applicant.

Let’s take a look at the most common types of mortgage available:

  • Repayment – you pay back the mortgage amount plus interest via monthly repayments
  • Interest only – you don’t repay the mortgage amount, just the interest
  • Fixed rate – the interest added to your mortgage is a fixed amount for a fixed period
  • Tracker – rates are directly in line with the Bank of England’s base rate
  • Variable – the interest rate is kept roughly in line with the Bank of England’s base rate, although this is not obligatory and is subject to the lender’s discretion
  • Discounted – a discount is offered off a specific interest rate, usually the lender’s Standard Variable Rate
  • Self-build – for those building their own home; you’ll need a good deposit, and loan amount is based on a percentage of the land and building costs
  • Buy to let – a mortgage specifically for those buying a property to rent out to a third party
  • Help to buy – A government initiative to help first-time buyers to get on the property ladder

There may also be other alternatives available which we can discuss during your initial consultation once your personal situation has been ascertained.

Which one is right for you?

Some types of mortgage are designed to suit a very specific set of circumstances, such as a self-build or buy to let mortgage. Other types of mortgage are based around interest rates and repayment options – so it’s important to choose the right one for you.

Selecting the best type of mortgage for you will depend on several factors, such as your financial status, your objectives and the level of stability you’re looking for in terms of your monthly outlay. When you work with Ian Hanson as your mortgage advisor, he will take the time to explain all of the options that you may be eligible to apply for and how your decision will affect your monthly outgoings.

For more information or to arrange a meeting, please contact us today to discuss your requirements.