What Type of Mortgage Can I Get?
There are a number of different types of mortgages available depending on your circumstances and how you want to repay.
Repayment mortgages
Probably the most well-known mortgage type. You’ll have monthly repayments for a set period of time, often 25 years, which cover some of what you borrowed plus some interest.
A good choice if: by the end of the term, you want to pay your mortgage off and fully own your home.
Fixed rate mortgages, Variable rate mortgage, Tracker mortgages, Discounted rate mortgages, Capped rate mortgages
A Fixed rate mortgage means your payments are fixed for a set period e.g. 2, 3, 4 or 5 years. Your monthly payments won’t change, which is good if interest rates go up, but not so good if they go down.
A good choice if: you want the reassurance of knowing exactly how much your payments will be every month.
Interest-only mortgages
Different to a repayment mortgage, with an interest only mortgage you only pay off the interest (rather than the capital) each month. These are more common for Buy to Let mortgages, It means monthly payments tend to be lower, but when the loan period ends you’ll need to pay off the mortgage in full.
A good choice if: you want low monthly payments and know you can save enough to pay off the mortgage when the time comes.
Cashback mortgages
A cashback mortgage is incentivised with a lump sum of money that’s paid once the mortgage is taken out. However, it’s important to check interest rates and fees as other mortgages could still work out cheaper.
A good choice if: you could do with some money to help with your move.
Buy-to-let mortgages
A Buy to let mortgage is available if you’re planning to rent out the property you’re buying. The amount you can borrow is often determined by how much you can charge as rent.
A good choice if: you want to become a landlord and buy a property to rent out.
How much can I borrow?
Your Miles Rhodes Mortgage adviser will have access to the whole market, with knowledge of who will lend the most, given your circumstances.
Lenders tend to use an affordability calculation which takes into consideration not only your various incomes but also your level of expenditure. To find out how much you could borrow, you’ll need:
Your income details (i.e. salary, bonuses, overtime & pension)
Details on any payments you make on money you’ve borrowed (personal loans and credit card payments)
Information about your outgoings (monthly travel costs, council tax, insurance policies, maintenance costs)