FISCUS MORTGAGES - INFORMATION AND ADVICE

Mortgage Types

There is a wide variety of mortgage products available in the UK market. Here, we explain the main types of mortgage, describe how they work, and help you decide which best suits your individual needs. We also suggest you take a look at our daily-updated Mortgage Tables, which allows you to compare leading UK mortgage rates and can be searched by mortgage type.

THE TWO BASIC TYPES OF MORTGAGE:

Interest Only Mortgage - Monthly repayments pay off the mortgage, while an investment builds over the lifetime of the mortgage that should pay off the mortgage at maturity.

Repayment Mortgage - Also known as a "capital and interest" mortgage, monthly repayments pay off the interest and the loan principal over the duration of the mortgage.

DIFFERENT TYPES OF INTEREST RATES:

Standard Variable Rate (SVR) - Mortgage repayments vary according to market conditions.

Tracker Mortgage - Mortgage repayments are linked to monthly movements in the Bank of England base-rate. Often referred to as just variable rate mortgages.

Fixed Rate Mortgage - Mortgage repayments are fixed for a set period of time, despite fluctuations in the Bank of England base-rate.

Capped Mortgage - A cross-between fixed and variable rate products, repayments may fluctuate with the Bank of England base-rate, but are capped at a maximum interest rate.

Discount Mortgage - A discount interest rate is offered for an introductory period, after which the interest rate is adjusted.

OTHER TYPES OF MORTGAGE PRODUCTS:

Offset Mortgage - Also known as a Current Account Mortgage, this allows a mortgage and savings product to be inter-linked, and can lower your tax liability.

Flexible Mortgage - Also known as an Australian-style Mortgage, this allows overpayment or early payment without penalty.

Islamic Mortgage - As Islam prohibits the payment of interest, these innovative financial products allow Muslims to take out a mortgage which is compatible with their faith.

Green Mortgage - A few UK lenders offer mortgages that, in part, are aimed at redressing the adverse environmental effects of housing.