What mortgage is right for me?

Repayment or interest-only mortgage?

Repayment mortgages are when you repay the interest and the equity of the house each month. An interest-only mortgage is when you repay the interest and then pay-off the equity at the end of the term. For the vast majority of people, a repayment mortgage is the most appropriate choice. They guarantee you are paying off your debt, and ensure you will have repaid the mortgage at the end of its term.

What is a fixed rate mortgage?

A fixed rate mortgage is when the rate is fixed for a set number of years, after which it reverts to the lender’s standard variable rate. Fixed rate mortgages are a popular option because you know exactly what your monthly repayments will look like over a set period. You avoid any increases in interest rates by the Bank of England during your fixed rate period. This being said, if the rates were to fall, you would not benefit from this either and you could be trapped in a higher rate mortgage.

If I choose to opt for a fixed mortgage, how long is recommended to fix for?

If you do decide to go for a fixed rate mortgage, you need to decide the term of it – normally two, three or five years. Going with a five-year fixed mortgage will give you greater certainty, and can be appealing for people in stable but financially stretched circumstances who want to minimise any financial risks. But a lot can happen to your circumstances in five years, and you may end up feeling trapped by a longer term.

The huge expenses involved in moving house will normally be behind you after two or three years, giving you greater capacity for coping with changes in interest rates. For these reasons, choosing to fix your mortgage for two or three years is recommended.

First-time buyer mortgage

There are various mortgages with special deals that are aimed at first-time buyers to help them get their foot on the property ladder. These types of mortgages usually accommodate having lower deposits and have lower application fees. In general, first time buyer mortgages can be very helpful at a difficult time. but it's important to still check out the rest of the market in case there are some other good deals.

What does a guarantor mortgage mean?

A guarantor mortgage is when a relative acts as a guarantor and agrees to make the mortgage repayments if you can’t. You can usually borrow a larger amount than you would be able to on your own.

So, how do I find the best mortgage?

Speak to a mortgage advisor! They can talk through your personal situation and help you choose the type of mortgage that best suits your needs.

If you're looking for a mortgage, get in touch today! We work with the UK’s most recognised intermediary consumer brand, Mortgage Advice Bureau to ensure our customers can find everything under one roof.