What type of mortgages are available to me?
There are two issues here to separate:
- Repayment type
- Type of interest you will be charged
The repayment type determines how you will repay your mortgage at the end of the term or before. Irrespective of which you choose you will then need to decide to choose the type of rate based on your circumstances and the prevailing markets
The two main ways to repay your mortgage are ‘repayment’ and ‘interest only’. With a repayment mortgage you make monthly repayments for an agreed period (the ‘term’) until you’ve paid back the loan and the interest.
With an interest only mortgage you make monthly repayments for an agreed period but these will only cover the interest on your loan. You’ll normally also have to pay into another savings or investment plan that’ll hopefully pay off the loan at the end of the term.
By and large the payments are not dissimilar and the advantages and disadvantages are what separate the two. The real issue after that is the type of interest:
2.Type of Interest
- Standard variable rate mortgage
- Tracker mortgage
- Fixed interest rate mortgage
- Discounted rate
- Capped rate
- Collared rate
- Standard variable rate with cash back
- Flexible mortgage
So what do they mean to you?
View the links in this section for more information on each of these interest types.
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