A mortgage is a sum of money, a lender (typically a bank or building society) lends to a borrower (typically an individual/s) which is then secured against a property. The lender lends the money (with the promise) that the borrower will pay them back plus interest on a monthly basis over the term of the mortgage. Should the borrower stop making repayments the lender has the right to take ownership of the property (this is known as a repossession).

What are the Different Mortgage Types?

There are many different types of mortgages and this section will explore some of the different types available to you. The first thing to understand is the Bank of England base rate. The Bank of England base rate is reviewed monthly and can go up or down depending on the state of the economy. The main measure for this is inflation.

All lenders set their rates based on the Bank of England base rate, so as a result, mortgage rates have been low for quite some time now. This is great news for you because when the rates are low – your payments are too!

The two most popular types of rates are fixed and tracker rates but there are other types you may want to consider depending on your circumstances so it’s always best to get advice on the right product for you.