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I offer professional mortgage advice so you don't have to do the hard work. There are a range of interest rate deals which are offered by most lenders. Some have special features and special offers and these charge all the time The best one for you will depend on your circumstances at the time - so it's important to understand your options so talk to me before making up your mind.
Which type of interest rate is suitable for you and your circumstances?
The suitability of different types of deal, will depend on your personal circumstances at the time, and any tie-ins (contractual periods you need to comply with after the deal is over) or penalties that may be attached.
Below is an outline of each of the options that are available.
Repayment methods and choices you have to make.
There are the two main methods, which will enable you to pay off your mortgage. These are called 'interest only' or 'repayment'.
With a repayment mortgage you make monthly repayments for an agreed period of time (known as or the terms) until you've paid back the loan and the interest owed on it.
Interest only mortgage
With an interest only mortgage you make monthly repayments for an agreed period however, this will only cover the interest on the loan you have taken out. You'll normally also have to pay into another investment plan or bank savings,to pay off the loan at the end of the term, however this involves an element of risk.
Standard variable rate
With a variable rate mortgage your payments go up or down with the lender's standard interest rate. This often changes following Bank of England base rate changes.
Standard variable rate with cash back
With these arrangements, you get a cash lump sum as well as the loan at the beginning, when you take out the mortgage. You're usually tied into the variable rate for a set period; however you may have to repay this, if you pay off the loan early.
You pay a lower interest rate at the beginning and then move to another rate (usually the lender's standard variable rate, but not always) after a set period.
Tracker rates are linked to the Bank of England rate or some other 'base rate' such as the ‘L.I.B.O.R.’ This means they'll always go up or down in line with changes to the rate it is tracking..
- make lump sum repayments
- pay off your mortgage early
- pay less one month and more the next
- take a 'payment holiday'
You pay a fixed rate of interest for a set period, so you know exactly what you'll be paying each month during that term. When the fixed period ends, you'll usually move to the lender's standard variable rate. There are usually penalties if you pull out early.
Capped or cap and collar
With a capped rate you pay a variable interest rate, but there's a ceiling so that your payments won't go above a certain amount for a set period chosen at outset. Some deals include a collar too; this is the lowest rate your loan will be subject to. If interest rates fall below the collar, you'll not have got the best rate, if they rise for sufficient time you will be better off.
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If you are looking for impartial and sound advice and would like to deal with an Independent Mortgage Adviser local to Southampton, then please feel free to phone me on 02380 434 446 or via email at email@example.comGet in touch today to find out how I can help your with your mortgage enquiry.