Which mortgage should I choose?

Once we have completed a factfind regarding your current personal circumstances and requirements, as well as your future plans we will be able to provide an appropriate solution to these needs.

However, here are a few things that you may wish to consider:

Payment type

There are two main payment types, capital repayment or interest only (you can choose a mixture of both with some lenders).

Capital repayment method will ensure that every month your payment will cover the interest and will also be used to reduce the capital balance of your mortgage. By the end of your mortgage term the balance of your mortgage will be paid off, if you have made all of your monthly payments.

Interest only method will mean that your monthly payments will only cover the interest due on your mortgage. Whilst the payments are lower, the balance of your mortgage will not reduce unless you make additional payments. It is important to remember that you need some form of repayment vehicle, or realistic plan to be able to repay the capital balance of your mortgage by the end of the mortgage term.

Product type

There a wide variety of products available but here is a brief summary of some of the products available:

Fixed rate mortgages – these products will mean that your payments are fixed for a specified period of time.

Tracker mortgages – these products track or follow the Bank of England base rate of interest for a specified period of time. This means that your payments could go up or down when the Bank of England review their base rate of interest.

Discounted mortgages – these products offer you a discount off the lender’s Standard Variable Rate of interest for a specified period of time. This Standard Variable Rate is not normally tied to the Bank of England base rate of interest although there are some exceptions. This means that your payments could change whenever your mortgage lender changes their Standard Variable Rate of interest.

Offset mortgages – these products will offset money held in a current or savings account against your mortgage balance. This means that if you had savings of £40,000 offset against a mortgage of £100,000, you would only need to pay interest on the difference of £60,000. Some products will allow you to use this method to reduce the term, whilst others will allow you to reduce your monthly payments.

There are other product types available and information can be provided upon request.

Term

Lenders will allow your mortgage to be paid over a variety of different terms. Some lenders will extend terms up to 40 years. You need to remember that a shorter term will mean that your capital repayments will be higher, but you will pay less interest. If you choose a longer term, you payments will be lower but you could end up paying more interest.