Are you looking for a mortgage?
Most homebuyers will need to secure a mortgage in order to buy a Green Spinnaker home. Our sales advisors are happy to suggest Independent Financial Advisors in order to guide you through this process.
Alternatively there are a number of very good resources available on the internet. Google Money allows you to compare mortgage deals from major UK lenders. They offer comparisons on mortgages for purchase, first time buyers and buy to let. You can select repayment and Interest only mortgages with different repayment periods, and single or joint applications. Google then provide a list of all providers offering suitable mortgages, the interest rates, fees, initial monthly repayments and over APR for comparison.
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Whilst we are unable to provide direct advice on mortgages we have put together a glossary of terms commonly used by mortgage providers to describe the different types of mortgages available. You should seek independent advice as to which might be the best for your own personal circumstances.
There are two principle types of mortgage:
- Repayment Mortgage: Every month you pay back some of what you have borrowed plus interest. At the end of the mortgage term you have paid back your loan in full. On some mortgages you can make overpayments to reduce the length of the term.
- Interest Only Mortgage: Your monthly payments only cover the interest on what you have borrowed. If you take out a £150,000 mortgage over 25 years. At the end of the term you will still owe £150,000.
There are a multiple of different types of mortgage on the market that use different methods to calculate interest repayable.
The interest rate that you pay will be calculated at a discount off a set interest rate eg. The Standard Variable Rate. The discount can be for an introductory period of 2, 3 or 5 years or longer. At the end of the period rates will generally revert to the standard variable rate. If you settle the mortgage within the introductory period then most lenders impose an Early Repayment Charge. Discounted mortgages can appear to be a good deal but are not necessarily cheaper in the long term. Rates will go up and down so you do not have the security of a Fixed Rate Mortgage.
The interest rate that you pay tracks the movement of another rate usually the Bank of England Base Rate. Tracker rates can be for an introductory period of 2, 3 or 5 years or for the entire length of the mortgage. At the end of the introductory period rates will generally revert to the standard variable rate. If you settle the mortgage within the introductory period then most lenders impose an Early Repayment Charge. Tracker mortgages can appear to be a good deal but are not necessarily cheaper in the long term. Rates will go up and down so you do not have the security of a Fixed Rate Mortgage.
Fixed Rate Mortgage
The Interest rate that you pay will be fixed for a set period of time, from a year to 10 years. At the end of the period rates will generally revert to the standard variable rate. If you settle the mortgage within the introductory period then most lenders impose an Early Repayment Charge. However most lenders will allow borrowers to make overpayments of up to 10% per year.
The interest rate that you pay is set at a recognised interest rate, usually The Standard Variable Rate or SVP. This standard rate depends on your mortgage lenders. Unlike Tracker mortgages linked to the Bank of England Base Rate, lenders can choose what to do when the base rate falls or rises and do not always pass on savings to their customers as quickly as they pass on increases.
An offset mortgage allows you to set your savings against your mortgage debt. This means that you give up your interest on your savings, which is taxable, and pay less interest on your mortgage. Over the term of your mortgage you can save thousands of pounds. You are also effectively earning much higher interest on your savings as you don’t have to pay tax.
Further Help & Information
To find out which Independent Financial Advisors we suggest then contact the sales team on 0333 358 3558.