Whether you are a first time buyer or looking to re-mortgage, you need to think about:

• What repayment method you want
• Which interest rate deal is best and
• If there are any special features you need to think about depending on your circumstances.

Methods:

• Repayment mortgage - the traditional method of repaying a
  mortgage. Each payment consists of both interest and capital.
  During the course of the mortgage term your debt will reduce to
  a nil balance. In the early years mainly interest is paid with very
  little reducing the capital debt.

• Interest only mortgage - make monthly repayments for an
  agreed   period covering only the interest on your loan. You
  normally have to   make monthly payments into a savings or
  investment plan to pay off the loan at the end of the term.

Interest Rate Deals:

• Standard variable rate - your payments go up or down with the
  lender's standard interest rate which changes when the Bank of
  England base rate changes. 

• Standard variable rate with cash back – same as above but
  you get a cash lump sum as well as the loan when you take out
  the mortgage. You are tied into the variable rate for a set period. 

• Discounted rate - you pay a lower interest rate to begin with
  then move to another rate after a set period. 

• Tracker rate – you pay a rate linked to the Bank of England or
  other ‘base rate’ so it goes up or down in line with changes to the
  base rate. 

• Fixed rate - You pay a fixed rate of interest for a set period so
  you know exactly what you pay each month. When the fixed
  period ends you move to the lender's standard variable rate. 
  There are usually penalties if you pull out early. 

• Capped rate - you pay a variable interest rate with a ceiling so
  your payments do not go above a certain amount for a set period. 
  Some deals include a collar too - this is the lowest rate you'll get.

Special Features:

Flexible, current account or offset mortgages give you more control to vary your monthly payments. They can be used with repayment or interest only mortgages. Features can include: 

• pay less one month and more the next
• make lump sum repayments
• draw back lump sum or overpayment amounts
• take a 'payment holiday'
• pay off your mortgage early

All Things Financial, impartial mortgage and financial brokers based in Weston-super-Mare, Somerset arranges effective and economical mortgages and loans from a very wide range of lenders and products – we are not tied to anyone. We are here to help you understand your options.

Contact us without obligation for more information or download one of our FREE reports!

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