When you start looking round for a mortgage, you'll soon realise that there are lots to choose from. So many in fact that the choice can be overwhelming and you probably don't know where to start.

There's a lot to take into account before deciding which mortgage you want. You'll find it helps if you have a broad understanding of how mortgages work and the various different kinds of mortgage available.

Here we explain the differences in order to help you work out which is the right type of mortgage for you.

Different types of Mortgages

Floating/ standard/ variable market rate

Standard variable rate mortgage is the simplest mortgage option and there are usually no early repayment charges if you want to move. The rate will vary as the market changes.

This is the normal interest rate your mortgage lender charges and it will last as long as your mortgage or until you take out another mortgage deal.

Tracker Mortgage

Tracker mortgages move directly in line with another interest rate. Normally the Bank of England’s base rate plus a few percent. Although trackers are variable rate mortgages, it’s easy to understand what rate you’ll be paying because they are directly linked to the base rate. Therefore the rate, and your monthly payments, will only change if the Bank of England changes the base rate.

Loyalty rate mortgages

Existing customers who meet the lender’s criteria may be offered a discount to the standard rate.

Fixed interest rate

The interest rate remains the same throughout the period of the deal – typically one to five years, though it is possible to get ten year fixed rates. If you opt for a fixed-rate, you’ll have the security of knowing exactly how much your mortgage will cost you for a set period of time.

Your mortgage payments will remain the same, even if interest rates changed. This makes it great for budgeting.

Discounted interest rate

This is a discount off the lender’s standard variable rate and only applies for a certain length of time, typically two or three years. Mortgages with discounted rates are some of the cheapest around but, as they are linked to the standard variable rate, the rate will go up and down when the standard variable rate changes.

Capped rates

This is a variable rate mortgage but one with a ceiling on how high your interest rate can rise. You have the comfort of knowing that your repayments will never exceed a certain level while you can still benefit when rates go down.

Offset mortgages

These work by linking your savings and current account to your mortgage, so that you only pay interest on the difference. You still repay your mortgage every month as usual, but your savings act as an overpayment which helps to clear your mortgage early.

What Makes Us Different ...

• Free initial consultation
• A comprehensive range of mortgages from across the market
• Introduction to preferential approach which are not available on the high street
• Maintain your application from begin to end and provide frequent updates

Help you to choose the appropriate category and amount of life insurance. So you can keep your asset safetly.

For more details call us on 01173 70 63 63, 0746 222 000 5