Mortgage Basics
Everything you need to know about mortgages in the UK. From understanding the basics to making informed decisions about your home purchase.
Everything you need to know about mortgages in the UK. From understanding the basics to making informed decisions about your home purchase.
A mortgage is a loan secured against your property. It's the most common way to buy a home in the UK, allowing you to spread the cost over many years.
Your home acts as collateral for the loan. If you can't keep up with payments, the lender can repossess the property.
Most mortgages run for 25-35 years, though you can choose shorter or longer terms depending on your circumstances.
The interest rate determines how much extra you'll pay on top of the loan amount. Rates can be fixed or variable.
Understanding the different types of mortgages available will help you choose the right option for your situation.
Your interest rate stays the same for a set period, typically 2-5 years. Provides payment security and budgeting certainty.
Interest rates can change during your mortgage term. Includes standard variable rates and tracker mortgages.
Special mortgages for property investment. Higher deposit requirements and different lending criteria.
Buy a percentage of your home and pay rent on the rest. Government scheme to help first-time buyers.
Lenders assess your affordability based on several factors. Understanding these criteria helps you prepare for your mortgage application.
Lenders consider multiple factors when determining how much you can borrow:
Understanding deposit requirements is crucial for planning your home purchase.
Most lenders require at least 5% of the property value as a deposit. However, 10% or more often provides access to better mortgage rates.
Government scheme allowing first-time buyers to purchase with just a 5% deposit. The government provides a 20% equity loan.
Deposits of 15% or more typically secure the most competitive mortgage rates. This reduces the loan-to-value ratio and lender risk.
Family members can gift money for your deposit. Lenders will require a letter confirming the gift and that no repayment is expected.
Lenders will verify your deposit source. Savings, inheritance, property sale proceeds, and gifts are all acceptable sources.
Remember to budget for stamp duty, legal fees, survey costs, and moving expenses on top of your deposit.
Interest rates significantly impact your monthly payments and total mortgage cost. Understanding the different types helps you make informed decisions.
Your interest rate remains constant for a set period, providing payment security and budgeting certainty.
Interest rates can change during your mortgage term, following the lender's standard variable rate.
Interest rates that follow the Bank of England base rate, typically with a fixed margin above it.
Understanding the mortgage application process helps you prepare and ensures a smooth journey to homeownership.
Research mortgage options, check your credit score, and save for your deposit. Use our calculators to understand affordability.
Speak with a qualified mortgage Adviser who can assess your situation and recommend suitable mortgage products.
Complete your mortgage application with all required documentation. This includes proof of income, outgoings, and deposit.
Once approved, complete the legal process and receive your mortgage offer. Exchange contracts and complete your purchase.
Get expert mortgage advice tailored to your situation. Our qualified Advisers are here to help you every step of the way.