There are five main types of mortgages available in the UK. They are: fixed rate, tracker rate, discount rate, flexible mortgage, and buy to let mortgage. Each one has its own set of pros and cons, which can make it difficult to decide which one is right for you. In this blog post, we will go over each type of mortgage and help you decide which one is best for your needs!
- Fixed rate mortgages are the most popular type of mortgage available in the UK. They are fixed for a set period of time, such as five years or more. During this time, you pay back your loan with interest at a rate that is agreed upon by both parties when signing up for the loan (this is called the “agreed-upon rate”).
- Adjustable-rate mortgages, or ARMs, are mortgages that have a variable interest rate. This means that the interest rate can change at any time, depending on the market conditions. While this may seem like a risky option, it can also be quite advantageous if rates go down after you take out the loan.
- Reverse mortgages are mortgages where you borrow against your home equity, but do not have to make any monthly payments. The loan is then repaid when you either die, sell the home, or move out of it permanently. This type of mortgage can be a great option for seniors who are looking to downsize or release some of the equity they have built up in their homes.
- Government-backed mortgages are mortgages that have been guaranteed by the Government. They are usually available to people who would not qualify for a traditional mortgage, such as first-time buyers with no deposit or low incomes (although there may be other requirements too).
- Conventional mortgages are those that do not require any government backing – they’re just standard mortgages where you borrow money from the bank.
In conclusion, there are many different types of mortgages available in the UK. You should look at all options before deciding which one is right for you.