- Buy to Let Mortgage
This is a mortgage for property that will be let by the borrower to other tenants. When Lenders calculate how large a loan the borrower can afford to repay on BTL they do so primarily on the basis of projected rental income, rather than salary income.
- Capped Rate Mortgage
Capped rate mortgages are supposed to offer the best of both variable and fixed rate deals. You agree to have a limit - a cap - on the maximum amount of interest you will pay over a particular period of time while allowing it to fall if the variable rate drops.
- Discounted Variable Rate Mortgage
To tempt new customers most lenders will offer a new borrower a discount on their standard variable rate, for a set period. Your payments will go up and down, as with a standard variable mortgage, but you're paying less. After the agreed set period the interest rate will switch into the mortgage lender's usual variable rate. The penalties for changing to another mortgage lender may last longer than the agreed discount term.
- Equity Release Mortgage
Equity Release is a means of using the value of your home to receive a lump sum. In all instances, age is the primary factor in determining the percentage of the value of your home that can be released. A person of an older age can release a higher percentage of the value of their home, than a person of a younger age, as they are not expected to live as long. There is no maximum age limit for equity release, although applications are not usually granted for anyone under the age of sixty. This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration.
- Fixed Rate Mortgage
This type of mortgage is where you and the mortgage lender agree to fix the interest rate owed on your loan for a set period of time. The period of time is usually between 1 and 5 years but could be longer. This simply depends on the mortgage product you have chosen. After the agreed period, the interest rate owed on your loan usually reverts to the lender's Standard Variable Rate. If you want to leave before the agreed term the early redemption penalty is usually significant. Some penalties could even go beyond the fixed-rate period. We will look at these for you.
- Interest Only Mortgage
As the name suggests, with an Interest-only mortgage, the monthly payment includes only this element of the debt. The upside of this is that the monthly cost is considerably lower than for a comparable repayment mortgage. The downside is that at the end of the mortgage term you still owe the original amount you borrowed. And if you can't repay it, your mortgage lender is perfectly entitled to repossess your home. If you choose this option, you need to organise a way to repay the capital debt.
Mortgaging a property you already own, usually replacing an existing mortgage. You can remortgage to obtain lower monthly payments, or if you have sufficient equity in your property, to raise money for a number of purposes.
- Repayment Mortgage (also known as Capital and Interest Mortgages)
This is the traditional type of mortgage and remains the only way the property is actually guaranteed to be yours at the end of the mortgage term - provided you have repaid the loan. Your mortgage debt is divided into capital repayments (ie repayment of the money you borrowed) and interest payments (ie repayment of the interest you're being charged for the loan). As you pay off your mortgage every month you're paying off a bit of capital and a bit of interest until the full debt is repaid. You usually pay off mainly interest in the early years and then gradually more of the capital debt.
- Standard Variable Rate Mortgage
Every Lender has a standard variable rate, or SVR, of interest on which it bases all its mortgage deals. These vary from lender to lender.
- Track and Fixed Mortgage
This is a new breed of mortgage deal designed to appeal to borrowers who want to benefit from a variable rate, but don't want to get stuck if rates begin to change. The lender will allow you to change between a tracker and a fixed.
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Your home may be repossessed if you do not keep up repayments on your mortgage