What is a mortgage?
A mortgage is a loan secured on your home. This works by borrowing a sum of money - the capital - which you payback on a monthly basis over a set period of time (the term).

During the term you also pay interest to the lender. The amount paid is calculated on the capital sum borrowed and is usually expressed in percentage terms e.g. 6.00% means that you would pay £6,000 in interest per year on a £100,000 mortgage loan.

As the mortgage is secured against your home it is important to protect yourself and your home against the unexpected. In the event of you being unable to keep up your loan repayments, the lender can repossess your home. We cannot predict the future for you but we can help give you peace of mind. Please visit our Life Insurance page.



Here is a brief guide to the three basic types of interest rate repayment.

Fixed
The rate is fixed for a set period of time, either a number of years or to a specific date. Once this period has ended, the rate goes back to the lender’s variable rate. You can choose what term you require the fixed rate period to be over. There are often early repayment charges on these rates if you wish to repay the loan before the fixed rate is up and, occasionally, for a short time after.

Tracker rates
A variable rate loan where the interest rate is a set amount above or below a base rate, generally
the Bank of England.

Discounted
This is a variable rate but set at a fixed percentage below the lender’s standard variable rate. If you wish to pay back your loan before the end of the discounted rate, you may have to pay a charge known as an early repayment charge. In some cases these charges apply for a short time after the discount rate has ended.