When you start out looking for a mortgage in Sunderland, you will soon realise that there are lots of different options available, but with our Mortgage Advice in Sunderland, we’ll help you on your way to deciding which is best. Below you will see a list of the most popular types of mortgages available on the market and hopefully. Any questions regarding any of the mortgage options below, then don’t hesitate to contact our brilliant team of Mortgage Advisors in Sunderland.
A fixed-rate mortgage means that your mortgage payments are going to stay the same for a set period. You can set the length of which you want to fix your payments for, typically, this being 2, 3, or 5 years or longer. No matter what happens to inflation, interest rates, or the economy, you know that your mortgage payment, usually your biggest outgoing, will not change.
A tracker mortgage means that your interest rate will track the Bank of England’s base rate. So, in other words, the lender that you are with does not set the rate themselves. You will be paying a percentage above the Bank of England base rate. For example, if the base rate is 1% and you are tracking at 1% above base rate, that means you will be paying a rate of 2%.
When you take out a repayment mortgage, this means each month you are paying capital and interest combined. Keep up to date with your payments during the full length of the mortgage term. The mortgage balance is guaranteed to get paid off at the end, and the property becomes yours.
A repayment mortgage is the most risk-free way to pay your capital back to the lender, in the early years it is mainly the interest that you are paying and your balance will reduce very slowly especially if you have taken out a 25, 30 or 35-year term. This situation switches in the last ten years or so of your mortgage, where your payments are paying off more capital than interest, and the balance will come down much faster.
While many Buy To Let Mortgages in Sunderland get set up on an interest-only basis, it is much more challenging to get a residential property on an interest-only basis.
It is much less likely for lenders to offer an interest-only product now. However, there are certain circumstances where this can be an option. These include downsizing when you are older or have other investments that you will use to pay the capital back. Lenders are stringent when it comes to offering these products now, and the loan to values are a lot lower than back in the day.
With an offset mortgage, the lender will set you up a savings account to go alongside your mortgage account. For example, let us say you have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you only pay interest on the difference, so in this case, £80,000. An efficient way of managing your money, especially if you are a higher rate taxpayer.