Mortgages In England

There is plenty of choice in the UK mortgage market, but with more than 3,000 deals on offer, identifying exactly which mortgage is best for you is important.

Many buyers consult our IPIN recommended financial advisers and mortgage brokers who will scour the market and find out which mortgage is the most appropriate for your needs, taken into account your financial circumstances, plans, attitude to risk and other preferences. Others arrange their mortgages direct, via the phone or on the internet.

Lenders vary from banks, building societies or other specialist lenders. With the large variety of mortgage products currently available in England, you'll be able to choose from a variety of mortgage options:

Variable rate mortgages - the interest rate you pay can vary over time. Every mortgage lender has a Standard Variable Rate (SVR) that is loosely based on rate established by the Bank of England (Bank Rate). Each lender's SVR is usually 1% – 2% above the Bank Rate.

Fixed rate mortgages – these are very popular in the UK. As the name suggests, they allow you to fix the rate of interest you will pay on your mortgage for an agreed period. Most UK mortgage lenders offer a range of fixed rate mortgages. The most popular fixed rate mortgages are 2 year, 3 year and 5 year deals, but it's possible to get a fixed rate mortgage for anything from 6 months to 25 years.

As a general rule, the longer the period of your fixed rate, the higher the interest rate you can expect to pay. However, as this market is so competitive, 2, 3 and 5 year deals are sometimes available at very similar interest rates, so it pays to shop around.

Capped rate mortgages – a mortgage similar to a fixed rate mortgage, in that there is a maximum interest rate set for a given period of time, and the rate you pay is guaranteed not to go above that rate for the agreed period. However, with a capped rate mortgage, should the Bank Rate fall during that period, the rate you pay for your mortgage will 'track' the interest rate downwards, reducing your mortgage repayments.

Tracker mortgages – these are similar to discount rate mortgages, but are arguably more transparent. With a discount mortgage, the lender offers you a set percentage from its own Standard Variable Rate (SVR). A tracker mortgage follows the Bank Rate set by the Bank of England charged at a defined margin, eg. if the Bank of England sets the Bank Rate at 5%, you might get a tracker mortgage at Bank Rate +1% = 6%.

Buy-to-Let Mortgages

Buying property to rent out privately is a hugely popular form of property investment in England the UK as a whole. In 2006, 10% of all mortgages taken out in the UK were buy-to-let mortgages.

Buy-to-let mortgages can make sound investments, but research is important as you will need to ascertain what buy-to-let mortgage types are available and what kind of renters to look for.

Share to Buy Mortgages

Due to today's rocketing prices, many investors, particularly young couples, are struggling to take their first step onto the property ladder. Many mortgage lenders are therefore offering special packages, such as the "Share to Buy" mortgage, allowing up to four parties (normally a group of friends or family) to enter into a joint mortgage with reduced costs and this method is becoming increasingly popular in the UK as a whole.

Remortgages

Remortgage simply means switching your mortgage deal and/or mortgage lender. Remortgages are very popular, and with good reason: Whether you are switching your deal for a better remortgage rate, more suitable conditions, better service or increasing the size of your home loan, there are plenty of deals for remortgages available. Banks, building societies, specialist lenders and mortgage brokers will all accommodate your remortgage needs.

Equity Release

Thousands of people are asset rich but cash poor. If you have a substantial amount of money tied up in your main asset that you want to get your hands on, you could always sell up and buy a smaller home; however, many older people would rather not sell the family home. If you have property in your own country and would like to borrow against this in an equity release plan, we can introduce you to independent financial advisors who can help you raise the necessary finance.

Increasing numbers of older/retired people are turning to equity release mortgages to allow them to free up some of the value in their properties. As the population continues to get older, and property continues to increase in value, this trend is certain to continue.

Costs

The fees associated with taking out and paying off a mortgage have tripled in the last decade and you will need to watch out for the hidden charges behind the cheap headline rates. In the past, lenders charged a fee to cover administration costs. But today, many lenders rely on fees to bring in extra revenue and have duly increased many of their fees.

Off-Plan

Many off-plan developments offer installment plans over between 12 to 60 months. The charges applicable vary according to developer and repayments are usually indexed.