Offset mortgage
March 29th, 2008 Filed Under Mortgage comparison
Offset mortgages are still a relatively new product in the UK mortgage market. If you’re very strict and thorough with your finances then an offset mortgage can definitely help you save money in the long run.
The basic idea of an offset mortgage is to combine a savings account with your mortgage account. So if for example you had a £100,000 mortgage and £10,000 in savings, you’d essentially be paying interest on just £90,000.
One thing to be cautious of is increased interest rates, whilst you may be paying interest on a smaller amount - if the rate is higher then it may not work out beneficial so ensure you check this!
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Fixed rate mortgage
November 28th, 2007 Filed Under Mortgage comparison
This week I’m going to talk about fixed rate mortgages (FRM). A FRM is as the name suggests, a mortgage with a fixed interest rate for a set amount of time. For example a two year mortgage with a set interest rate of 15%. This means you will always know exactly what you’ll be paying each month until the deal expires.
The fixed rate option is perfect for those who are on a tight budget and want to know exactly what they’ll be spending out each month and is therefore very popular with first time buyers. Knowing there will be no nasty suprises can be a huge relief off the mind and give first time buyers the confidence they need to make the big step of buying a property.
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Standard variable rate mortgage
November 5th, 2007 Filed Under Mortgage comparison
As discussed previously, I intend to go through and compare the benefits of the many different mortgages available. This week i’ll talk about the standard variable rate mortgage (SVR). The SVR is the standard rate a bank uses and as the name suggests it is variable. Because the rate is linked to the Bank of England base rate it is variable so if the base rate goes up so will your mortgage.
Generally speaking people don’t stick with an SVR for very long since it is the package you are usually moved onto when your initial offer period expires. Personally I think its worth exploring other lenders before getting yourself tied into a standard variable rate.
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Which mortgage is right for you
November 2nd, 2007 Filed Under Mortgage comparison
I have spent close to a year reading up on all the different mortgages available and trying to work out which ones are best for each circumstance. For example you may be looking to get onto the property ladder meaning the mortgage that will best suit your need will differ from that of someone who owns multiple properties already.
The way I see it, there are 8 main mortgages available and each one has its own pros and cons. The 8 are as follows:
- Standard variable rate
- Fixed rate
- Offset
- Flexible
- Discounted rate
- Tracker rate
- Capped rate
- Buy to let
At first sight this list can seem daunting and confusing but I will go through each one in future posts with a brief description and then an indepth discussion of the benefits of each one.
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