The different types of mortgages in the marketplace and the many different options, rates, and programs can be intimidating. Here at MoneyAid.co.uk, we strive to make this process as simple as possible by allowing you compare the best mortgages in the industry. By simply submitting some basic information online, we will get you quotes from the most competitive lenders in the marketplace. Looking for the right mortgage can be confusing, but we've done the homework for you.

Fixed Rate:

A fixed rate mortgage is a type of mortgage where the monthly repayment mortgage is fixed for a specific period of time.  This payment is fixed regardless of whether the Bank of England’s rate changes or the market’s mortgage rates fluctuate.  Most fixed rate mortgage programs last from two to five years, but terms up to 25 years are available.  Generally, when the fixed rate period comes to an end, the rate reverts to the Lender’s standard variable rate.  Fixed rate mortgages protect borrowers from rising interest rates over time.

Variable Rate:

A variable rate mortgage is a type of mortgage where the monthly repayment amount is affected up or down by the changes to the Bank of England’s base rate.  Lenders generally offer variable rates by quoting a margin over the Bank of England’s base rate.  This is typically 1.5%-3.5% above the Bank of England’s current base rate.  The lender’s variable rate however, does not necessarily rise and fall by the same exact amount as the changes in the Bank of England’s base rate.  If you require a loan that is tied directly to the Bank of England’s base rate, look to a Tracker Rate Mortgage.

Tracker Rate Mortgage

Tracker Rate mortgages are tied directly to the Bank of England’s base rate.  If the Bank of England’s base rate moves up or down the mortgage rate moves up or down by the same amount.  There is generally an agreed upon margin above the Bank of England’s base rate.  Terms are generally shorter, but longer term tracker rates mortgages are also available.

Capped Rate Mortgages

A capped rate mortgage is generally a variable rate mortgage with a maximum upper limit that the rate can rise to.  For example, if you have a capped mortgage rate of 8%, your mortgage rate will fall and rise depending on market mortgage rates, but it can never go higher than 8% even if market mortgage rates are higher than 8%.  Most capped rate mortgages also have a minimum floor amount (often called a “Collar”) that the mortgage rate cannot fall below even if the market mortgage rates fall below that specified minimum floor rate.

Discounted Rate Mortgages

Discounted Rate Mortgages are types of mortgages where the lender agrees to offer a rate below the standard variable rate for a specific period of time.  The rate may still fluctuate, but it will stay below the standard variable rate during the discounted rate period.  The rate will generally go back to the standard variable rate upon expiration of the discounted rate period.    

Interest Only Mortgages

An Interest Only Mortgage is a loan secured by real estate where the payments are paid only to interest and not to any principal amount.  The amount you owe at the beginning of the loan term would be the same amount you owe at the end of the term but payments are generally lower.  These mortgages also come with discounted rate, fixed rate, and variable rate type loans.

Buy to let Mortgages

A Buy to Let Mortgage is a loan secured by real estate where the borrower intends to rent the property to tenants rather than a personal residence.  This is income producing property so the underwriting is a bit different.  The lender will also take into account the current or future rental income of the property when underwriting the loan.

Self Cert Mortgages

A Self Cert Mortgage is a loan secured by real estate where the borrower certifies his or her income instead of providing documentation to prove income.  This loan is generally targeted towards self-employed people or contract workers.  Because the Lender is relying on the borrowers certification without income documentation, rates are generally higher than standard mortgages.

First Time Buyer Mortgages

There are many loan programs designed for first time home buyers.  These can range to zero down or 100% loans or even higher (up to 125%).  Our lenders will let you know which programs are available to you.

Mortgage Protection

Mortgage protection is basically insurance against losing your home due to some unexpected event that will render a borrower unable to make his or her payments.  Such events can be death, redundancy, critical illness, or long term sickness.