Mortgage Types

An interest only mortgage is an arrangement that allows you to just pay the interest charged each month over the term of the loan. You must repay the mortgage outstanding back in full at the end of the term.

Repayment mortgages are home loans that require you to repay a portion of the capital along with some of the interest every month. As long as you are on time with your payments, you’re guaranteed to have the entire mortgage paid by the end of the term.

With this type of mortgage, your interest rate is fixed and guaranteed to stay the same for the duration of the fixed rate. It helps with budget planning.

These are standard variable rate mortgages. The mortgage lender gets to decide whatever the rate is. If the rate increases so does your mortgage payment, if it decreases your mortgage payment reduces. These rates tend not to have any early repayment charges.

These follow the Bank of England base rate, they are fixed at a percentage higher or lower than the Bank of England base rate for an initial period. If the Bank of England base rate increases so does your mortgage payments, if it decreases your payments will reduce.

This is a type of mortgage that is a type of variable interest rate, which means that your payments can go up and down. A set discount on a lender’s Standard Variable Rate is offered and this is how it works.