Mortgage Types - A BPS guide.
The mortgage market can be complex and confusing - that's why we're here!
We start with you, your individual circumstances and your mortgage aspirations.
Then we'll apply our extensive knowledge of the mortgage market and relationships with lenders to match you with the mortgage most appropriate to your needs.
Check out our short guide to mortgage types - then give us a call to see if we can find the right one for you!
Fixed Rate Mortgages
These types of mortgages fix the rate of interest throughout an introductory term.
That means that for, typically, the first 2-5 years of your mortgage, your monthly repayments are fixed.
This is great if you want to easily keep track of your outgoings.
However, you may be liable for penalties if you then wish to repay the mortgage early.
A great product for budgeting ahead as repayments will remain the same even if interest rates rise.
You're also tied to the rate if interest rates fall. And if you want to exit the mortgage early, you may incur an early repayment charge which can be £££s!
Tracker Rate Mortgages
Tracker Mortgages 'track' the Bank of England base rate, for example, and so repayments can go up or down. Lenders often offer introductory terms of 2-3 years and can charge an early repayment penalty if you choose to repay early.
Right now, tracker mortgage rates are slightly lower than on fixed rate deals. This can change with market conditions however you can easily understand what your monthly repayments will be.
Tracker mortgages don't offer the same security as fixed rate mortgages because the rate is variable. Your mortgage repayments can rise as well as fall, so you should do some financial planning to ensure you can make your mortgage repayments each month.
Like tracker mortgages, discount mortgages are a variable rate mortgage product. However, they are linked to the lender's Standard Variable Rate. Lenders can change their Standard Variable Rate even though the base rate has not changed.
Discount mortgages can also offer introductory terms of 2 to 3 years and may incur penalties if you decide to leave your mortgage deal before the introductory term is over.
Rates can be lower than they would be on a fixed rate deal and are subject to change. So if your lender's current Standard Variable Rate was to fall, your monthly payments would reduce as well.
As discount mortgage rates are linked to a Standard Variable Rate, the lender can adjust this at any time. So even if the Bank of England base rate remains steady, if you lender changes their Standard Variable Rate, this will be reflected in your repayments.
For your Fee Free Mortgage Consultation call us on 028 3833 8000 or visit the BPS team at our offices in Portadown, Moira or Belfast - or we can come to you. We already help clients across Northern Ireland and the UK.
Your home may be repossessed if you do not keep up repayments on your mortgage.
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