If you’re thinking of buying your first home or re-mortgaging your current home it’s essential that you understand what the different types of mortgages there are!
This will stop you from getting trapped with a bad deal that just looks good at the start & could save you from losing your home.
So there are two main types of Mortgages, i’m going to keep it short and tell you exactly what you need to know about each one:
This is one of the most popular types of mortgage. The way Repayment Mortgages work is pretty simple, you pay back a bit of the loan and a bit of interest every month. That about it!
What Are The Best Repayment Mortgage Deals?
With Interest-Only Mortgages, you pay back the interest each month and only pay back the original loan at the end of the mortgage term.
What Are The Best Interest-Only Mortgage Deals?
Now you understand the two different types of mortgages, we’re going to talk about the different mortgage deals that you need to know about:
These are really simple, you just pay the same interest rate until the end of the Mortgage.
What Are The Best Fixed Rate Mortgage Deals?
The interest rate you pay follows (tracks) the Bank of England base rate. So the interest you usually pay is Base Rate (Bank of England) + your mortgage rate.
What Are The Best Tracker Mortgage Deals?
Pretty much the same as Tracker Mortgages, you just get a little discount on the interest rate.
What Are The Best Discount Mortgage Deals?
This uses money that you have you savings account to reduce the amount of the loan a.k.a mortgage that you pay interest on.