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Finding the right mortgage

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Finding the right mortgage

A mortgage will be arguably the biggest financial commitment you ever make, so it’s worth spending some time to find the right one.

On the surface, mortgages are a minefield of different products and confusing terms, yet there are a few fundamental basics they all have in common. Before you start looking, it’s worth looking at the different types of mortgages available to you and learning how they work.

Your mortgage options

Standard Variable rate – with a standard variable rate mortgage your payments may go up or down as the lender adjusts their rate in line with general interest rates.

Fixed-rate – if you like the idea of the same mortgage payment each month, then this may be the ideal choice. The rate of interest on these loans is usually fixed for a set period of time.

Capped-rate – with a capped rate mortgage your payments are guaranteed not to rise above a pre-agreed amount. Unlike a fixed mortgage, you’ll also benefit from lower monthly payments if the interest rate goes down.

Tracker – this type of loan ‘tracks’ movements in the Bank of England base rate for a specified period of time. So, if the base rate falls, borrowers can look forward to lower monthly payments.

Cashback – if you’re looking for a mortgage that gives you extra cash to spend when you move in, a cash back option could be the answer. This could be anything from a one off payment of £200, to a percentage of the overall loan.

Flexible/Australian – with this kind of loan you have a greater degree of flexibility in how you repay. So, you can pay more when you have more money and pay less or take a payment holiday when you have less to spend.

Offset/Current Account – this combines your mortgage, current account and savings account into one and uses spare cash in your current account and savings to reduce your mortgage payments.

If you would like help in choosing the right mortgage, or would like to find out more about mortgages, please contact Persimmon today and we’ll put you in touch with one our recommended mortgage brokers.