Mortgages & Protection

What types of mortgage product are there?

Each lender has its own 'Standard Variable Rate' of interest (SVR), which it will change, at its discretion, usually following a change in Bank of England base rates. Borrowers, who do not have any special mortgage product, will pay interest at this normal rate.

In order to attract borrowers, lenders may offer products with more attractive interest rates or other benefits. The commonest product types are:

Discounted rates - the rate will be a fixed amount below the lender's normal rate, for a defined period. The rate will therefore change, if there are changes in the SVR, but the discount will remain.

Base rate trackers - the rate will be a fixed amount above or below the Bank of England base rate for a fixed period, or in some cases, for the entire mortgage term. The rate therefore varies by the same amount as changes in base rate.

Fixed rates - the rate will remain the same for a fixed period, regardless of what happens to the SVR or Bank of England base rates. The monthly mortgage payments are therefore fixed for a known period.

Cashback - the lender will give the borrower a lump sum, which is usually a percentage of the loan amount.

Flexible - these allow overpayments and underpayments, with interest being charged on the mortgage balance, on that day. Some products incorporate savings accounts or current accounts, with chequebooks, where the account balances reduces the mortgage interest payable.

Fixed rates and products which offer attractive short-term rates or cashbacks usually have penalties, if the loan is redeemed within a certain period.

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Your home may be repossessed if you do not keep up payments on your mortgage.

For mortgage advice you can choose how we are paid: a fee, usually 0.5% of the loan amount, or we can accept commission from the lender.

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