Mortgages

Different types of mortgages available.

Fluctuating

Basically, the rates "fluctuate" in line with market changes. These changes, depending on your choice of mortgage, could be as a result of moves in the lender's standard variable rate of interest, or because of an initial discounted rate offered at the beginning of the mortgage or the interest rate could be directly linked to the Bank of England's base rate of interest.

Controlled

These rates remain the same and will not increase. For instance, you may opt for a "Fixed Rate" mortgage which has a rate of interest that will not change for a set period of time. Consequently, your mortgage payments will stay the same also. Another type of Controlled mortgage is a "Capped Rate" mortgage, which means that the interest rate will never rise above a certain level, during a set period of time. However, if interest rates fall in general the rate will go down. This means that you will be aware of the maximum mortgage payment you would have to pay during the set period of time.

Lifestyle

These types of mortgages are designed around the specific needs of the individual with an emphasis on the inevitable changes of circumstances that can take place during our lives and our differing needs and requirements. For instance, a Flexible mortgage is ideal if you want to control the repayment amount each month, paying off more to reduce your mortgage when you can afford to or reducing the amount when your finances are low. Or you may like to consider a mortgage which is linked to your Current Account where the interest is calculated on the amount you owe at the end of each day. So the more you pay into your account, which remains unspent - the lower your borrowing will be, reducing your monthly interest repayments accordingly. Similarly, an Offset mortgage combines your mortgage with savings, personal loans and any credit cards and they are calculated on the mortgage rate of interest.

Your home may be repossessed if you do not keep up repayments on your mortgage.