For most people a mortgage will be the largest financial commitment they will make so you need to find one that is most suitable for you. One of the most important factors is the type of interest rate you decide on and typically mortgages are available at three different types of interest.
With a Variable Rate Mortgage, the lender varies the interest rate according to market conditions. With a Capped Rate Mortgage although interest is paid at a variable rate it cannot rise above a predetermined level usually for the first few years of the loan. Finally, with a Long Term Fixed Interest Rate Mortgage the interest level is fixed again usually for the first few years of the loan. Other important considerations are; your income, the length of the loan and the deposit you can afford. Lenders will usually let you borrow 3 times a single gross salary or 2 and a half times a combined gross salary. You should then add to this the deposit you can afford and the total is the property value you could aim for. More about mortgages...
Mortgage lending was up 21% in March 2011 compared to February, The Council of Mortgage Lenders (CML) released new data recently showing overall advances were unfortunately 2% lower than than the previous year and were pessimistic about it leading to any raise in house prices.
While gross lending reached £11.3 billion last month, up from £9.3billion in February, this meant the total value of mortgages accepted in the first 3 months of 2011 reached £30.1billion, this amounts to 1% more than same period in 2010.
While it is unlikely that there will be any significant growth in lending until 2014, there is also no expected decline in the Mortgage market
Mortgage interest rates
Variable interest rate |
Fixed interest rate ( Long Term) |
Discounted interest rate |
Capped interest rate |
Base rate tracker |
Interest only Mortgage |
First Time Buyer Mortgage | Fixed Rate Mortgage | Cash-back mortgage
Flexible mortgage |
Current account mortgage | Offset Mortgages
Fixed interest rate
A fixed interest rate means you know the exact monthly cost of your mortgage over a fixed period. Fixed rate mortgage terms can be from 1-25 years. A lower rate of interest is charged if the term chosen to fix the rate is short.
Capped Rate Mortgage
Like fixed rates, a capped interest rate mortgage has a top limit meaning the lender cannot increase the interest rate on the mortgage. The advantage of a capped rate mortgage is that it allows you to benefit from low periods of interest, this is what makes it different from a fixed rate mortgage, a capped rate mortgage can fall if the bank of England lowers its variable interest rates below that of the cap set. Another similarity to a fixed rate mortgage, is that the the lower the term chosen to cap the interest rate, the lower the upper limit or cap will be.
Variable Rate Mortgage
Interest rates on a variable rate mortgage are as they sound "variable" they move up and down and are dictated by the standard variable rate (SVR) usually set by the your mortgage provider. A variable interest rate mortgage is a blessing during periods of low interest, but beware it does not offer protection from periods of high interest.
Discounted Rate Mortgage
A discounted rate mortgage works in a similar way to a variable rate mortgage. If a lower term is chosen the higher the discount. During the initial period, or in some instances throughout the lifetime of the mortgage the lender may offer you a lower standard variable rate.
Base Rate Tracker Mortgage
A base rate tracker mortgage works like a variable rate, but instead of paying the interest rate set by the mortgage lender, it is the base rate set by the Bank of England(BOE)that you pay. It is important that you have a low loan to Value (LTV).
Deferred Interest Rate Mortgage
With a deferred interest rate mortgage you to make lower repayments than the actual rate of interest charged for a period of time agreed by your mortgage provider, The outstanding interest sum is then added to the capital sum of your mortgage. This can be a very expensive way of arranging your mortgage as interest is charged on the outstanding amount of interest as well as the original capital borrowed.
Flexible Rate Mortgage
A flexible mortgage has the advantage of letting you make overpayments in addition to your normal monthly repayment. This means you could pay your mortgage quicker, when you do make an overpayment the level of interest charged is re calculated . With a flexible mortgage you can borrow back any over payments you made in the future. This can be in the form of a lump sum or to lower your normal monthly repayments.
Interest only mortgage
Self Cert : Bridge : Adverse
Mortgage problems? there are many reasons for being declined a mortgage such as bad or adverse credit or maybe being self employed (see Self Cert Mortgages),
What is Self Cert? | self-employed | Non-status | Self Certifying a mortgage
More about Problem Mortgages...
Adverse Credit Mortgages -
Bad & Poor Credit
An adverse credit mortgage (sub prime / non-standard mortgage) is for people who have what is known as an adverse credit history.
Getting the best mortgage deal
Mortgages are part of a highly competitive industry, which is good news for mortgage seekers as companies are giving better deals. Of course having to much choice has it's drawbacks, every thing can get a little confusing.
Best Mortgage deal tips
Be sure to get information about mortgages from more than one lender or broker. find out how much of a down payment you can afford or is needed, and find out all the costs involved in the mortgage. simply Knowing the amount of the monthly payment and the interest rate is not adequate.
Mortgage Interest Rates
Remortgages
A new mortgage replacing the existing mortgage on a property in which the borrower already owns. Switching from one mortgage lender to another for a new mortgage loan at a better rate will help you to raise capital. There are good and bad credit remortgages for UK residents at some of the Lowest Rates available online.
Some reasons to remortgage your home
- Better mortgage rates so you can reduce your monthly outgoings
- Debt Consolidation, such as outstanding credit card balances
- Raise funds for home improvement costs, such as a new windows or
to finance a business loan
- Release equity on your home
- Financial problems
- Saving on interest rates
- Mortgage lenders use incentive schemes for re mortgaging with lower interest rates to attract new leads.
it is worth shopping around for a better deal on a mortgage, and the savings on a Remortgage can be seen in your monthly payments.
More about re mortgages...
Mortgage Calculators
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Mortgage News & Articles
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Base Rate Trackers
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95% Mortgage Deals
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What happened to Stepped Mortgages
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Fixed Rate Mortgages & High LTV’s
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UK Loans
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CAT Standard Mortgages
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Mortgage Options for the Self-Employed
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Interest Only Mortgages Going?
Interest Only Mortgages Going? Since the recession took a hold in 2007 over 250,000 homeowners have changed their mortgages from a repayment mortgages to interest only mortgage, this is largely due to the fact that many borrowers were in arrears… Interest Only Mortgages Going?
Individual Voluntary Arrangement
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Right to Buy Mortgages
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Calculating a Mortgage Payment
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Coventry Building Society Mortgage Deals
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Loan Sharks
What is a Loan Shark Credit can come from a many sources. Banks, Building societies and financial institutions provide credit to individuals. Some retailers provide credit indirectly, choosing to use finance houses. Loan Sharks are unlicensed lenders. They are usually… Loan Sharks
Annuities
Annuities refer to any terminating stream of fixed payments over a fixed period of time using monthly payments to savings accounts, mortgage and insurance payments. Try our Annuity Calculator Investment annuities By taking on more risk, investment annuities offer the… Annuities
Non Status Mortgages
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How do I get an Adverse Bad or Poor credit rating?
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Self Build Mortgages
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Secured Personal Loans
To help you make the right decision regarding Secured Personal Loans let’s first explain how they work. A loan is money lent on a condition that it is to be repaid, this can be in the form of the installments… Secured Personal Loans
Capped Rate Mortgages
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