Mortgages

Buying property is a significant investment for anyone, and most of us need financial assistance when making this purchase. With so many products now available there is increased choice and competition within the market place, which represents good news for you as the consumer.

The basics

In essence there are four core types of mortgage; fixed, variable, discounted and tracker. There are of course other variations on these but this is the basis upon which most mortgages are developed. Which is right for you is down to your circumstances at the time, the market and professional input from an Independent Financial Adviser.

The tools

Fixed rate mortgages simply provide a fixed monthly repayment throughout the term agreed. The rate tends to be slightly higher than other mortgage types but the benefit is you can budget much more effectively.

Variable rate is based on the standard variable rate quoted by the lender. They calculate this themselves using the Bank of England base rate as their starting point. This therefore goes up and down in line with the Bank of England interest rate.

Discounted rate is basically similar to the variable rate but as the name suggests it is discounted fractionally. While this can go up as well as down, lenders can be quicker to put the rate up than they are down.

Tracker rate mortgage is linked to the Bank of England base rate and although it is still variable it can go up or down. It is more likely to be adjusted as changes in the base rate are announced and therefore you may benefit from any reductions quicker.

There is also a range of mortgages designed for specific circumstances:

First time buyer mortgages can be available during buoyant market conditions that offer over and above the property purchase value. This simply helps with the other financial aspects surrounding a house purchase such as deposit, conveyancing fees, furnishing the property and so on. (Please note that current market conditions dictate that these are not currently available).

Buy to let mortgages differ slightly from standard residential mortgages in that you are required to pay a larger deposit, usually 25%, as lenders perceive this type of mortgage a greater risk.

If you would like to discuss your requirements with one of our Independent Financial Advisers then please complete the enquiry form and we will contact you to assess your circumstances, review the market place and then present options for you to consider.