There isn't just one kind of mortgage. UK lenders offer different types based on how your interest rate works, how you pay the loan back, and your circumstances. Here's what each one means.
Most UK mortgages fall into one of these two rate types. Your choice affects how your interest rate behaves over the term of the deal.
With a fixed rate mortgage, you'll pay the same interest rate for the full term of the deal. Deals are usually between 2 and 10 years, with 2 and 5 year terms being the most common.
Whichever rate type you go with above, you'll also need to decide how you'll repay the loan itself. There are three common ways to do it.
The most common way to repay a mortgage. Each monthly payment goes towards both the amount you borrowed and the interest. By the end of the term, the balance is cleared.
Your monthly payment only covers the interest. At the end of the term, you'll need to repay the amount you borrowed in full, using a separate repayment plan you've set up.
With an offset mortgage, the lender takes the amount in your linked savings account away from how much you owe on your mortgage. You'll only pay interest on what's left.
These mortgages are built around specific circumstances, from smaller deposits through to self-employed income.
Being your own boss shouldn't stop you getting on the property ladder. Lenders typically look at accounts, SA302s and contractor income to work out what you can afford.
A 95% mortgage lets you borrow up to 95% of the value of your home with as little as a 5% deposit. Aimed at first-time buyers and home movers without a large deposit.
Buy-to-let mortgages are for borrowers who want to buy a property to rent out, rather than live in. Lenders typically work out affordability based on the rental income the property could earn.
Nottingham Building Society is working with Mortgage Advice Bureau to help you find the right mortgage for your new home. Their advisers have access to over 12,000 mortgages from more than 90 trusted lenders, so they can find a fit for your circumstances. Just answer a few quick questions about the property and how much you want to borrow. An adviser will then call you to talk through your options, get you a decision in principle, and guide you through to your dream home.