When you take out a mortgage, the number one question is usually, ‘How much will I have to pay each month?’ The answer depends of course on how much you borrow – but also on what mortgage deal you have.
Here you can find out more about the different types of mortgage deal such as fixed rate, tracker, capped, discounted and variable.
How do mortgage rates affect me?
A mortgage deal is the agreement you have with your lender, covering the initial rate of interest you will pay, and how long you’ll pay this rate for. Remember that a deal may not last for the whole period of your mortgage – most fixed-rate deals last between two and five years, though a few do run for longer.
How do I get a good mortgage deal?
Getting the right mortgage deal for you depends on both your attitude to risk and your circumstances, including your credit score. If you are in a strong financial position with a large deposit, or are prepared to pay a higher arrangement fee, then you should be offered a better range of deals to choose from. However, if you have only a small deposit, and cannot (or don’t want to) pay a big arrangement fee, then your choice will be more limited.
Comparing different types of mortgage deal
The risk when taking out any mortgage is that interest rates may rise in the future, increasing your monthly repayments – perhaps until you can no longer afford them. This is why many buyers try to limit their risk through their particular mortgage deal. Here are the main types of deal available, and their pros and cons.