Whether you’re new to the mortgage market or you’ve had a mortgage for more years that you continue to remember then we thought we’d put together a quick guide to the most popular mortgage types.
Fixed Rate:
A Fixed Rate mortgage means mortgagee will see neither no increase or no decrease in the monthly mortgage cost throughout the term of the fixed deal. If the Bank of England Base Rate should change, the fixed term monthly cost will remain fixed. This is a great type of mortgage for those who like to budget each month and know exactly how much their mortgage repayments will be.
Variable Rate/Tracker:
With a tracker mortgage, the monthly repayments can move either up or down in line with the Bank of England Base Rate. This type of mortgage is best suited to those who want to take advantage of the lower base rates but are also happy to meet the monthly repayment costs should the base rate rise.
Capped Mortgage:
A capped mortgage works much like a variable rate mortgage however there is a ceiling point as to which the monthly repayment will not exceed. So, if the Bank of England increase the base rate and the mortgage lender decides to pass this onto their customers, the mortgage repayments will only increase until they reach that capped amount. If the Base Rate then falls, so will the monthly repayment. This style of mortgage is good for those who are happy to meet the highs and lows of the interest rates however, they prefer to draw a line at the highest point they can afford to pay.
It’s really important that you find the right mortgage for yourself and your circumstances and speaking to a professional mortgage adviser can be an important part of that process. We can advise on the right style of mortgage for you, talk you through your options as well as help you through the application process. Give the team a call today on 03333 44 85 11 or email enquiries@onlinemortgagecalculators.co.uk