RuthJames
Mortgages

Types of Mortgages

A mortgage is a long term loan that enables people to buy their home. If you look the word “Mortgage” up in a dictionary it means a debt that is secured against the value of the property. This means that when the property is sold the lender has first charge (or in Scotland , a standard security) – and must be paid first. With your home as security, the lender is usually able to offer you a lower interest rate than you find with other types of loan.

Mortgage Types

WARNING: YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

A mortgage is a long term loan that enables people to buy their home. If you look the word “Mortgage” up in a dictionary it means a debt that is secured against the value of the property. This means that when the property is sold the lender has first charge (or in Scotland , a standard security) – and must be paid first. With your home as security, the lender is usually able to offer you a lower interest rate than you find with other types of loan.

What types of mortgages are there? 
There are hundreds of mortgages on the UK market. Speak to the adviser at RuthJames Mortgages about which mortgage is the right option for you. In the meantime, we have broken them down into a brief summary below:

Standard Varible Rate (SVR)

This is the basic interest rate offered by lenders. 

Fixed Rate

With a fixed rate mortgage you pay the same interest rate for an agreed amount of time.

Flexible Mortgages

A flexible mortgage allows you overpay or underpay.

Offset Mortgage

With offset mortgages, your savings can used to pay off your mortgage early

Interest Only Mortgage

Your monthly payments to the lender cover only the interest on the loan. The full amount of the loan has to be repaid to the lender at the end of the term.

Buy to Let Mortgages

This is a mortgage for property you want to buy and then let out for rent. Buy to Let mortgages are not regulated by the FCA.

Capped Rate

A capped rate mortgage guarantees that your monthly payments cannot rise above a certain amount.

Discounted Rate

A discounted rate mortgage offers a reduction of a given amount on the standard variable rate usually for a set period of time.

Cashback Mortgage

Some lenders offer cashback mortgages where you receive a percentage of the loan shortly after completion.

Tracker Mortgage

Tracker Mortgage tracks the Bank of England base rate.

Combination Mortgage – Part and Part

With a combined mortgage a proportion of the loan is treated as an interest only mortgage and the remainder as a repayment mortgage.