Our Guides On Property
The types of mortgage scheme available in the mortgage market are diverse and may seem they exist simply to confuse you!. How do you know which mortgage interest rate is best for you? Should you get a traditional mortgage, flexible or offset mortgage?
We know it can be difficult to choose the right deal for your circumstances unless you are an expert. A mortgage is probably the largest expenditure you will ever undertake so getting it right is essential, that is where we would like to help you. We can compare different mortgage lenders, type's & rates to suit you, we will help you pinpoint the right product in a cost effective & pain free manner.
A fee of between 0% and 2% of the loan amount is payable on application. Typically this will be £295
Our Regulator, the Financial Conduct Authority requires all advisors to give you their contact details and various documents relating to the services they will provide, the remuneration they will receive and the products they are recommending. These documents contain important information so please do take the time to read them. If you have any doubts or questions please discuss them with your advisor.
KeyFacts about our Mortgage Proposition
- Whose mortgage products we able to advise and offer
- Whether we offer advice or just information
- Who regulates us
- What to do if you have a complaint
- What you will have to pay us for our services
KeyFacts about this Mortgage [KFI]
- The overall cost
- What you willpay each month
- The interest rate type and the rate of interest
- What fees you need to pay
- If there are any special features of the mortgage
- What happens if you don’t want it any more
Read all documentation thoroughly, if in doubt ask.
Banks, building societies and specialist lenders offer mortgages and you can usually go to these lenders directly, although they can only offer you information about their own products. To obtain advice from a wider range of lenders and products speak to one of our mortgage advisors who can look at a larger selection of products for you, this will increase your chances of finding the most suitable product for you.
Is your advisor regulated? Ours are..
In the UK, firms selling mortgages must be regulated by the Financial Conduct Authority (FCA), the UK’s financial services regulator, or be the agent of a Regulated firm. Regulated firms and their agents are put on the FCA Register and have to meet certain standards.
All our advisors are properly regulated, so you can be assured any advice you receive is your best interests. If however, you feel this is not the case you have access to complaints and compensation procedure, which would not be available should you encounter unregulated advisors.
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You can choose to repay your mortgage in certain ways: repayment, interest-only or a combination of the two. You’ll need to decide which is best for you, contact one of our advisors if you need to clarify anything or to discuss your best options
Every month, your payments to the lender go towards reducing the amount you owe as well as paying the interest they charge. So each month you're paying off a small part of your mortgage debt.
The pros:It's a simple, clear approach – you can see your loan getting smaller.
The cons:In the early years your payments will be mainly interest, so if you want to repay the mortgage or move house in the early years, you'll find that the amount you owe won't have gone down by very much.
Interest Only Mortgage
As the name suggests, your monthly payment only pays the interest charges on your loan – you're not actually reducing the loan itself. This is why it's very important you arrange some other way to repay the loan at the end of the term, for example through an investment or savings plan.
If you choose this option you will need to check that your investment or savings plan is on track to pay off the loan at the end of the term. If it doesn't grow as planned, you will have a shortfall and you'll need to think about ways of making this up.
The pros:Because you're only paying off the interest, and not the loan itself, your monthly payments will be lower.
The cons:Throughout the life of the mortgage, you'll need to check your investment or savings plan is on track to repay your loan at the end of the term. If you can't repay it at the end of the term you could lose your home. If you’re relying on a rise in your property’s value, there is no guarantee it will be enough to repay the loan.
So, choosing a repayment or interest-only mortgage is a major decision, the other will be to choose your mortgage product.
So, can you help me obtain one?
There are so many mortgage deals to choose from: fixed rates, tracker rates, flexible mortgages and offset mortgages, if your unsure which is the best mortgage deal for you our simple table below explains the more common types.
Fixed Rate Mortgage
With a Fixed Rate Mortgage the monthly repayment amount is fixed for a specified period irrespective of changes to the Bank of England's base rate or the lenders standard variable rate.
At the end of the fixed rate the interest rate reverts to the lenders standard variable rate. A fee called an early redemption penalty would apply if you chose to cancel your fixed rate mortgage within the fixed rate period.
Variable Rate Mortgage
A Variable Rate Mortgage is based on the lenders standard variable rate. The lenders standard variable rate is generally affected by movement within the Bank of England's base rate. Standard Variable Rates vary from lender to lender but are typically 1.5%– 3.5% above the Bank of England base rate.
Capped Rate Mortgage
A Capped Rate Mortgage is similar to a fixed rate in that it will not rise above a pre-set rate, known as the cap. However unlike a fixed rate mortgage, if the lenders Standard Variable Rate falls below the capped rate, your rate will fall in line with it.
Discounted Variable Rate Mortgage
A Discounted Variable Rate Mortgage has an interest rate where a discount is applied to the lenders standard variable rate for a set period. As the lenders standard variable rate moves up or down the discounted rate moves up or down by the same amount.
Tracker Rate Mortgage
A Tracker Rate Mortgage follow's movement in the Bank of England base rate at an agreed differential. The Tracker rate mortgage is available for a fixed period or the life time of the loan. The most common tracker rate period is 2 years, though many mortgage lenders now offer 3 year, 5 year and even 10 year track rate mortgages.
Flexible Rate Mortgage
Flexible Rate Mortgage schemes allow you to make overpayments or in some cases underpayments without incurring penalties. You can therefore tailor your current financial situation to the mortgage payments that you make. When you have spare cash you can overpay and if necessary you can underpay, or in some cases miss a mortgage payment when finances are tight.
Not all flexible mortgages are the same however and you should carefully read the terms and conditions of any flexible mortgage to ensure it has the facilities you are looking for, before committing yourself.