Mortgages explained

If you’re thinking about buying a property and need a mortgage, this informative guide can help you gain some clarity on what to expect.

What is a mortgage?

The majority of buyers require a loan to purchase a property. This loan is known as a mortgage.

Mortgages can be obtained from banks, building societies and mortgage lenders. They will assess your circumstances and lend you an amount that you can realistically afford to repay. They will charge interest on the loan, and you will have an agreed time span (mortgage term) to repay the amount borrowed. It is important to understand that the interest rate can and will change over the duration of the loan.    

There are several key things to consider when choosing your mortgage:

• How much can you afford to borrow and repay on a monthly basis?
• How long should your mortgage term be?
• Which repayment option is best for you?
• Which type of mortgage is most suitable for your circumstances?

How much can I borrow

The amount you are able to borrow is dependent on a number of factors, so you will need to consider the cost of moving, your monthly income and expenditure and your credit history.

How long is a mortgage term?

Your Mortgage Services Consultant can help you to find the right number of years (term) over which to repay your mortgage. If you spread your mortgage over a longer-term, your monthly repayments will be lower. However, please note that the longer your mortgage term, the more interest you will have to pay the lender.

What are my repayment options?

There are two main mortgage repayment options available to you: repayment and interest only. The availability of both will depend upon your circumstances. Please note that part repayment, part interest-only mortgages may also be available; your Mortgage Services Consultant can discuss this with you.

Please see our Repayment Methods Explained document to find out more.

What types of mortgage schemes are available?

You have several options when choosing a mortgage scheme, with the most common being Fixed or Variable. Find out more about the different types of mortgages available here. Your consultant will be able to help you decide the right scheme for you based on your individual circumstances.

What are mortgage rates?

Mortgage rates are the interest rates you pay on the loan for your property. In general, lower rates mean lower monthly payments and overall costs, while higher rates mean higher payments and costs. The rate you pay is affected by the Bank of England base rate, your credit score, your deposit size and the lender’s criteria as different lenders offer different rates

To find the best mortgage rate and product for you and your circumstances, we recommend talking to a mortgage consultant who can help you pick a mortgage product from a panel of lenders.

When getting a mortgage, your consultant will assess how much you can afford to pay each month based on the initial mortgage rate. This handy calculator gives you an idea of typical monthly mortgage payments based on the length of your mortgage (Mortgage Term) and initial mortgage rate.

Contact a qualified mortgage consultant to find out more, and download our guide to mortgages for more insight.

Countrywide Mortgage Services is a trading name of Countrywide Principal Services Ltd which is authorised and regulated by the Financial Conduct Authority (Firm Registration Number 301684). Registered Office: Countrywide House, 6 Caldecotte Lake Business Park, Caldecotte Lake Drive, Milton Keynes, MK7 8JT. Registered in England no. 01707341. MS/CW/7559/07.24