Types of Mortgages

With a fixed-rate mortgage, the interest rate stays the same for a set time (usually two to five years). This can provide peace of mind and make it easier to budget, as you’ll know exactly how much your mortgage repayments will be each month.

A tracker mortgage follows the Bank of England’s base rate, so your interest rate will go up or down with changes to the base rate. This means your monthly repayments can fluctuate, which can be good or bad depending on how interest rates change.

A variable-rate mortgage has an interest rate that can change anytime. This can make it difficult to budget, as your monthly repayments could go up or down at any time.

A discounted rate mortgage offers a discount on the lender’s standard variable rate for a set time. This can lower your monthly repayments, but it’s essential to know that the rate could go up after the discounted period ends.

An offset mortgage allows you to use your savings to reduce the interest you pay on your Mortgage. Your savings are linked to your Mortgage, so any interest you earn on your savings is used to offset the interest you pay on your Mortgage.

With an interest-only mortgage, you only pay the interest on the loan each month. This means your monthly repayments are lower, but you’ll need the plan to pay off the capital at the end of the mortgage term.