Residential mortgages are mortgage agreements used to finance the purchase of a residential property. They are used when you buy your first home, moving home or when you are looking to make improvements to a property.
A residential mortgage typically has a term of 1 to 40 years. The term of the loan that you choose will depend on your age and affordability. The shorter the term the less interest you will pay.
What is the difference between fixed and variable rate mortgages?
If you take out a fixed rate mortgage, the interest rate you pay will be fixed for the initial period, regardless of rate changes made by the Bank of England. Fixed rates are typically two, three, five or occasionally ten years, with the interest rate rising accordingly. Once the fixed period ends, borrowers are pushed onto the standard variable rate which can be much higher.
Variable mortgage rates can vary during the mortgage term, meaning that borrowers will not have the security of knowing how much their repayments will be every month, but because the mortgage comes with the uncertainty of interest rates either rising or falling in the future, the initial rate is often much lower than with fixed mortgages.
For those who want the peace of mind of a fixed monthly cost, and for anyone who doesn’t want the risk of fluctuating interest rates, fixed rate mortgages are appealing.
The cheapest deals – best buy tables can be deceiving!
It is important to look beyond the headline rate of a product. A low rate on a fixed mortgage may look attractive, but keep an eye on the subsequent rate, as well as any arrangement fees, exit charges and early repayment costs.
Make sure you also consider the costs of legal and survey work.
We will search the whole of the market to find the best deal for you. Give us a call and save yourself time and money!