Types of Mortgage

A repayment mortgage means that you prefer to have the certainty that your mortgage loan is repaid at the end of the term. This means taking out a mortgage that is designed to use each monthly payment to pay interest and pay back part of the capital outstanding. If you keep up your payments your entire loan will be repaid at the end of the mortgage term.

An Interest Only Mortgage means taking out a mortgage that is designed to use each monthly payment to purely pay interest on the capital outstanding. If you keep up your payments your entire loan will still need to be repaid at the end of the mortgage term. It is your responsibility to ensure there are sufficient monies available to repay the loan at the end of the term.

Fixed-rate mortgages come with an interest rate that is guaranteed to remain constant for a set period of time. This is typically a number of years, after which point the interest rate will usually move onto the lender’s standard variable rate.

The rate of interest charged varies over time in line with the mortgage providers' Standard Variable Rate. Effectively this is a rate that is determined by the provider, but will often be linked to other factors such as the Bank of England's base rate.

With a tracker mortgage, the rate of interest directly tracks another rate, such as the Bank of England's base rate. This means that it could rise and fall over time.