Why use a mortgage broker?
Choosing your mortgage is perhaps the most important financial decision you’ll ever make. The only thing which stands between you and saving – or spending – thousands of pounds in extra interest, is what you do now. Researching the different types of mortgages, comparing mortgage interest rates – it all takes time and let’s be frank, when you’re looking for your new home or looking to remortgage, time is often at a premium.
This is where we come in. A mortgage broker will do all of the leg work for you, taking the time to understand your own specific situation and pointing you towards the mortgages which would work best for you.
We understand the market, inside and out – after all, we do this every day – and we’d never recommend anything which we weren’t completely confident was in your best interest. You don’t even have to take our advice.
Come and speak with us, our advice and consultations are completely free.
So, even if you already have a mortgage in mind, it’ll cost you nothing to run this by our mortgage advisors – we are confident we could secure you an even better rate.
When you go with Mortgage Matters Direct and you’ll have access to:
Thousands of different mortgages from over 75 lenders.
Exclusive mortgages which aren’t available on the high street.
Genuine advice from a network of industry leading mortgage experts.
Mortgage interest rates explained
Fixed rate mortgage
With a fixed rate mortgage, the interest rate is fixed. So, regardless of what happens to the variable rates, your rate and monthly payment will be fixed for a limited period. The key benefit for this type of mortgage is the consistency which it offers. The amount which you pay back will remain the same each month, irrespective of rising – or falling – interest rates.
Talk to us about our fixed rate mortgages
Variable rate mortgage
Choose a variable rate mortgage and the interest rates set by lenders will rise and fall throughout your mortgage term – and so will your mortgage payments. If your income is bonus-based or if you want to make unlimited overpayments, then a variable may suit your needs more than a fixed rate would.
Talk to us about our variable rate mortgages
Discounted mortgage
Some lenders offer a discount on their standard variable rates as an incentive for their new borrowers. The discounts are usually for a short period after which time the standard variable rate is applied. With a discounted mortgage, your monthly payments can rise or fall, in line with rising or falling Interest Rates.
Talk to us about our discounted mortgages
Base Rate Tracker
The Bank of England sets its base rate each month independently from mortgage lenders. The interest charged on a tracker mortgage is linked directly to – and will rise and fall in line with – the Bank of England base rate.
Talk to us about our base rate tracker mortgages
Capped mortgages
Capped mortgages set a maximum limit on the interest rate charged. Payments and rates may rise or fall, but will not exceed this maximum limit. The maximum limit will usually last for a limited period only.
Talk to us about our capped mortgages
What is an interest only mortgage?
With an interest only mortgage, you do not make any capital repayments. Your monthly payments are correspondingly lower but the original capital sum remains outstanding at the end of the term.
Bear in mind, there are risks associated with this type of mortgage and your home may be repossessed if you can’t make the final repayment. It’s up to you to make arrangements to cover the final balance – for instance an ISA, investment fund or pension. This is otherwise known as a repayment vehicle. Without a repayment vehicle in place, you may have to sell the property to repay the mortgage balance.
Advantages
of an interest only mortgage
Lower monthly repayments.
Flexibility – With lower monthly repayments, you are free to decide which type of repayment vehicle or strategy suits you best.
Profit – Okay, so it’s not guaranteed but being in control of how the remainder of your mortgage is paid can allow you to make savvy investment choices which could even result in you making a profit after you’ve paid back your mortgage.
Disadvantages
of an interest only mortgage
You pay more overall – because you’re only paying the interest on your mortgage, the original sum which you’ve borrowed will remain the same – and accruing interest – until you clear your mortgage.
You could lose your home if you fail to repay the whole amount – we can’t stress this enough. It’s up to you to ensure you have a repayment vehicle to cover the actual cost of your home and to monitor the risk involved with this.
What is a capital repayment mortgage?
A capital repayment mortgage requires you to repay both the interest and the original capital sum gradually over the term of the mortgage. Provided all payments are made in full and on time, the full loan is guaranteed to be repaid at the end of the term.
Advantages
of a capital repayment mortgage
Peace of mind – you can’t put a price on the peace of mind that comes with the knowledge that your mortgage will be repaid in full at the end of the mortgage term.
Less risk – There’s always risk involved in borrowing such large sums of money. However, compared to interest only, capital repayment has less risk attached to it.
Reduce your borrowing – because each month you’re paying off some of the loan, your loan value is decreasing every month – and so is the interest you’ll have to pay.
Disadvantages
of a capital repayment mortgage
Higher monthly payments.
Although the pros for a capital repayment mortgage far outweigh the cons, you should think carefully about your options. Also, bear in mind, you could always choose a combination of the two.
What is a part-and-part mortgage?
Some lenders will allow you to combine interest only and repayment plans. This may be useful if you have a repayment vehicle already in place or if you require short term funding and are able to make a capital repayment from a yearly bonus, for example.
Just how much of your mortgage is capital repayment and how much is interest only will depend on your lender. If you’re interested in finding out more about this kind of mortgage, pick up the phone and we can talk you through it.
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