Mortgages explained

Taking out a mortgage may be the biggest financial commitment that you will make - but that doesn’t mean it has to be stressful!

First Mortgage’s “Mortgages Explained” section can help you understand the differences between the main types of mortgage and what to look for when arranging a deal. When you have decided which type of mortgage is right for you, First Mortgage can scour the whole of the market for the best possible rates.

Mortgages explained - what is a mortgage?

Mortgages explained - ways to repay

Mortgages explained - what about remortgaging?

Mortgages explained - how much can I borrow?

Mortgages explained - protecting your mortgage

Mortgages explained - how do I find the right deal?

Mortgages explained - what is a mortgage?

A mortgage is a type of loan that you take out to cover the purchase of residential (and sometimes commercial) property. The loan is secured against the property, so if you do not keep up repayments, your home can be repossessed. However, these days there are many different ways to repay your mortgage, each offering different pros and cons.

Mortgages explained - ways to repay...

First of all, you will have to decide whether you want an interest only, repayment, or part and part deal. This will determine whether you repay a percentage of the capital and the interest each month, or just the interest (putting the rest into a savings fund).

There are then several main rate types to choose from, each with its own advantages:

 Fixed - pay a set rate of interest for an agreed period

 Tracker - your interest rises and falls in line with bank interest rates

 Discounted - offers a small discount on the lender’s standard variable interest rate

 Flexible - vary your monthly repayments

 Capped - your interest rate won’t rise above an agreed level for a set period of time

 Current account - these combine a banking account with a mortgage, allowing you to make overpayments and receive daily interest changes

 Offset - hold all of your other borrowings with the same lender

Added to these ways to repay, there are many different types of specialist mortgage, from debt consolidation deals to first time buyer mortgages.

Find out more about different mortgage types

Mortgages explained - what about remortgaging?

It has become much more popular to switch your mortgage before you have finished your current term. This is known as remortgaging. It can be an excellent way to find better rates, save money, consolidate debts or change the way in which you repay your loan. Find out more about remortgages

Mortgages explained - how much can I borrow?

Different lenders will offer different amounts depending on your financial history and current earnings. However, you can get a good idea with our how much can I borrow calculator and find out what your monthly repayments could be with our mortgage calculator.

Mortgages explained - protecting your mortgage

Mortgage protection is a type of insurance that gives you the security of knowing that in the event of illness, redundancy or even death your mortgage repayments will be paid. Most people do not think about what will happen if they weren’t able to pay their mortgage repayments, but it’s an important question to ask. Find out more about mortgage protection

Mortgages explained - how do I find the right deal?

Once you have decided which type of mortgage is right for you, let First Mortgage do the rest! We scour the whole of the market, checking every bank and lender for the best deals. You can phone us on 0845 603 1525 for advice and assistance in choosing the best mortgage deal, or get a quote online.

Further reading on mortgages and property:

BBC Your Money | Financial Services Authority | Council of Mortgage Lenders | HM Treasury