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"The Easy Way to Get Your Best UK Mortgage" |
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Mortgage
lenders offer a whole raft of deals that are priced
lower than their standard
variable rate (SVR) of interest,
and this can make choosing a loan seem very confusing.
But, actually, most of the deals on offer are basically
fixes or discounts, and deciding which you prefer
is a major step towards selecting your mortgage.
(There are other types if you want, you can read about
them in our A-Z of all UK mortgage
types.)
What is a fix?
With a fixed-rate deal you agree at the outset to pay your mortgage
lender a certain rate of interest
for a certain number of years.
If you want to get out of the deal early, you will face an early
redemption penalty.
The pros: You know exactly what your
mortgage payment will be each month, and even if interest rates
generally rise, your costs won't go up.
The cons: If interest rates generally
fall, you could be stuck on an uncompetitive rate for years.
What is a discount?
With a discounted deal, you agree to pay a certain percentage
below your lender's standard
variable rate (SVR) for a certain number of years.
Again, if you want to get out of the deal early, there will
be an early
redemption penalty.
The pros: If interest rates fall,
your monthly payment will go down.
The cons: If interest rates rise,
your monthly payment will go up.
How to choose between
them
If you can't afford to have your payments increase, or you believe
interest rates will rise, you might be best to choose a fix.
If you can afford to take the risk that your payment will rise,
or you think rates are going to fall, you might prefer a discount.
To help you decide what length of fix or discount to take,
read What
length of deal should I choose?
To find out more about redemption penalties, go to Early
redemption penalties explained.
For more on interest rates generally, see What
is a standard variable rate?
See your Full
Guide to Fixed Rate Mortgages UK
To check the Best Buy Tables for todays best value Fixed Rate mortgages with NO extended redemption penalties / overhanging tie ins Click here
What
is a mortgage?
A basic summary of the
rules
The
choices you need to make
How much can
you borrow?
How do you prove
your income?
How long are mortgages
usually for?
What will happen to interest rates?
How
to Choose your Mortgage
Types of Mortgage
Remortgages
Where to Find your Mortgage
Getting
a Mortgage in Principle
Guide to Buying Home in the UK
Guide to UK Home and Mortgage Insurance
To read more on this subject please see the list below or your mortgage guide or your home buying guide
Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below
Read more Mortgage Basics (list below)
See contents of Full Mortgages Guide
See contents of Home Buyers Guide
I've read enough for now and want to get a free Quick Mortgage Quote
Mortgage Basics
What
is a mortgage?
A basic summary
of the rules
How much can
you borrow?
How
do you prove your income?
How long
are mortgages usually for?
Here we give you a step by step guide on how to get a mortgage with special tips
I'm
employed - shortcut
I'm self-employed
- shortcut
I'm
buying my first mortgage -
shortcut
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got a bad credit history -
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Mortgage
Basics
How
to Choose your Mortgage
Types of Mortgage
Where to Find Your Mortgage
Getting a Mortgage in Principle