Which mortgage suits me?

A mortgage uses your property as a security for a loan. This means that, if you don’t keep up repayments on the loan, the lender can go to court for a possession order and force the sale of your home.

How does a mortgage work?
A mortgage has two parts - the capital (the money borrowed) and the interest (the charge made by the lender until the loan is paid back).

How do you choose the right mortgage?
There are two initial decisions to make when you choose a mortgage - how you want to repay the loan and what type of mortgage suits you best. You’ll also need to consider how much deposit you have, and choose whether to take a mortgage with a product fee or not.

How do you want to repay your loan?
There are two main ways – an ‘interest only’ mortgage or a ‘repayment’ mortgage. With an interest only mortgage, you only pay the interest on the borrowed amount each month. This means that at the end of the mortgage term you will still owe the same amount you borrowed. So you will need to plan how to pay this off. With a repayment mortgage, you pay off part of the capital each month as well as the interest. This means that as long as you keep up the repayments your mortgage will be repaid in full at the end of the term.

Making extra payments
If you are thinking about paying extra off your mortgage, remember that some mortgage deals have an Early Repayment Charge if more than 10% is repaid each year during the early years. The amount charged is shown with the mortgage rates information. Not all deals have Early Repayment Charges, and they will only apply for a limited period, in most cases the same as the mortgage deal you choose e.g. the period your rate is fixed. If there’s no Early Repayment Charge, or the period has expired, you can repay your loan in part or in full whenever you want.

Which mortgage is for me?
There are lots of different mortgages on offer and deciding which mortgage to go with can be difficult. The most common types we offer are explained here.