Which mortgage is right for you?

A fixed-rate mortgage is a type of mortgage where the interest rate remains the same for a set period, typically between two and ten years. This means that your monthly mortgage payments will remain the same throughout the fixed-rate period. Fixed-rate mortgages are popular with homeowners who prefer to have a predictable monthly cost, as they offer a sense of security and stability. However, it's worth noting that fixed-rate mortgages often come with higher interest rates than variable-rate mortgages.

A variable-rate mortgage is a type of mortgage where the interest rate can fluctuate based on changes in the base rate set by the Bank of England. This means that your monthly mortgage payments can go up or down, depending on the movement of interest rates. Variable-rate mortgages can offer a lower initial interest rate than fixed-rate mortgages, but they can also be less predictable. Homeowners who opt for variable-rate mortgages often do so because they believe that interest rates will remain low or decrease in the future.

Discount mortgages are a type of variable-rate mortgage where the interest rate is set at a discount to the lender's standard variable rate (SVR). The discount rate is usually offered for a set period, typically between two and five years, after which the mortgage reverts to the lender's SVR. Discount mortgages can offer a lower initial interest rate than fixed-rate mortgages, making them an attractive option for homeowners who want to keep their initial monthly payments low. However, it's important to note that discount mortgages can be less predictable than fixed-rate mortgages, as the interest rate can go up or down, depending on changes to the lender's SVR.

A tracker mortgage is a type of mortgage where the interest rate is set at a fixed percentage above the base rate set by the Bank of England. This means that your interest rate will move up or down in line with changes to the base rate. Tracker mortgages are similar to variable-rate mortgages, but they offer a higher level of predictability. If the base rate remains low, your monthly mortgage payments will remain low, but if the base rate increases, your payments will increase too. Tracker mortgages can be a good option for homeowners who want to benefit from low interest rates but also want some degree of predictability.

An offset mortgage is a type of mortgage that allows you to link your mortgage to your savings account. The idea behind an offset mortgage is that the balance in your savings account is used to offset the amount you owe on your mortgage, meaning you only pay interest on the difference. This can help you to pay off your mortgage faster, as you will be paying less interest over the life of the loan. Offset mortgages can be either fixed or variable rate, and they can be a good option for those with savings who want to reduce the amount of interest they pay on their mortgage. However, it's important to note that offset mortgages often come with higher interest rates than other types of mortgages, and you may need a large amount of savings to make them worthwhile.

Guarantor mortgages are a type of mortgage that can help first-time buyers who may not have a large deposit or a strong credit history. With a guarantor mortgage, a family member or close friend agrees to be responsible for the mortgage payments if the borrower is unable to make them. This can give lenders more confidence in lending to those who may not meet their usual lending criteria. However, it's worth noting that guarantor mortgages can be risky for both the borrower and the guarantor. If the borrower is unable to make the payments, the guarantor may be liable for the debt. As with any financial decision, it's important to consider the risks and speak to a financial advisor before committing to a guarantor mortgage.

Family Assist mortgages are a type of mortgage that allows family members to help their loved ones get onto the property ladder. With a Family Assist mortgage, a family member agrees to use their own home or savings as security for the borrower's mortgage. This can help first-time buyers who may not have a large deposit or a strong credit history to secure a mortgage. Family Assist mortgages can be a good option for those who have family members who are willing and able to provide financial support.

Skipton Building Society is offering a new type of mortgage to first-time buyers that works out a buyer’s borrowing power based on their 12-month history of rental payments across the previous 18 months. This new mortgage paves the way for renters to get onto the property ladder without needing a hefty deposit. In fact, this mortgage is only available for first-time buyers with a deposit of 5% or less.