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The type of mortgage products in the market are diverse and choosing the mortgage product which is right for you can be a daunting task. Which mortgage is best for you? It all depends on your financial circumstances.
Some lender may offer a flexible fixed rate mortgage which allows early repayments and if you can afford to do so, this can save you money on interest in the long run.
Variable rate mortgages are usually pegged to the Bank of England’s base rate with an extra 1% to 4% on top of the base rates. Variable rates are subject to government interest rates and do not offer a guaranteed rate. This may be a better option if you can afford extra payments on your mortgage if the rate changes upwards. With variable rates, if the base rates decrease, you can pay more into the capital repayment of your mortgage which means you are better off in the long run.
However a tracker rate mortgage can offer a guaranteed differential between the base rate by applying a limit to ups and downs in the interest rate. Banks and building societies offer these over 3 to 20 year terms and can be a better option if you wish to hedge some of the interest rate variations on your mortgage.
Getting advice from mortgage advisers and different lenders will give you the best comparison and a good deal.
Variable rate mortgages are usually pegged to the Bank of England’s base rate with an extra 1% to 4% on top of the base rates. Variable rates are subject to government interest rates and do not offer a guaranteed rate. This may be a better option if you can afford extra payments on your mortgage if the rate changes upwards. With variable rates, if the base rates decrease, you can pay more into the capital repayment of your mortgage which means you are better off in the long run.
However a tracker rate mortgage can offer a guaranteed differential between the base rate by applying a limit to ups and downs in the interest rate. Banks and building societies offer these over 3 to 20 year terms and can be a better option if you wish to hedge some of the interest rate variations on your mortgage.
Getting advice from mortgage advisers and different lenders will give you the best comparison and a good deal.
When choosing a mortgage, there are two main stream product type to choose from, a fixed rate and a variable rate.
The fixed rates tend to have a terms of 2 to 5 years after which the mortgage interest rate reverts back to a standard variable rate, unless you sign up for another fixed rate term. The rates you get depend on you financial circumstances and the products from banks. Usually there is a broad range of rates between 4% to 7% and the cheaper end of the rate would need a higher deposit (called the LTV - loan to value ratio). If you can manage a 60% LTV, you will be able to get a cheaper rate at around 4% or even less with some larger banks. However the fixed rate mortgages tend to include early repayment fees if you pay more than the agreed monthly repayment amount.
The fixed rates tend to have a terms of 2 to 5 years after which the mortgage interest rate reverts back to a standard variable rate, unless you sign up for another fixed rate term. The rates you get depend on you financial circumstances and the products from banks. Usually there is a broad range of rates between 4% to 7% and the cheaper end of the rate would need a higher deposit (called the LTV -
Mortgage products