Mortgage Guide
A quick guide to mortgage types

This mortgage guide aims to quickly outline the types of mortgage available in the UK. First time buyers in particular may find this overview of mortgage types of use.

For further information on any type of mortgage listed just click the orange titles.

Types of mortgage

Despite all the names given to mortgages, there are essentially only 2 types of mortgage available; Repayment mortgages and Interest only mortgages. All the other names used are generally describing offers or incentives that accompany a mortgage of one of these two main types.

• Repayment mortgages
  Also known as a Capital & Interest mortgage. Repayment mortgages require that you pay back a proportion of the loan, together with interest, each month. Click here for more about repayment mortgages.

• Interest only mortgages
  Interest only mortgages are also often referred to as ISA, pension or endowment mortgages. With an interest only mortgage your monthly payment covers only the interest on the loan. At the end of the loan period you are required to pay back the entire loan amount. Click here for more information about interest only mortgages.

Interest rates

The rate at which interest on your mortgage is charged can be calculated in one of four ways. Each method has it's own advantages and disadvantages.

• Fixed rate
  The rate of interest charged is fixed at an agreed rate for a stated period. Click here for more about fixed interest rate mortgages.

• Capped rate
  With a capped rate mortgage, the interest rate paid will not rise above an agreed level. Click here for more about capped rate mortgages.

• Discount rate
  Discount rate mortgages offer a lower level of interest for a set period. Click here for more about discount rate mortgages.

• Variable rate
  With a variable rate mortgage the level of interest you pay will change based on the current base rate. Click here for more about variable rate mortgages.

Other offers and incentives

There are various other offers and incentives that mortgage lenders will use to encourage you to take your mortgage with them. Click on any heading below for more information.

• Flexible / lifestyle mortgages
• Current account mortgages
• Cashback mortgages
• Free legal fees, contributions towards conveyancing etc.

This content of this site is for information purposes only, as a plain speaking introduction to mortgages. No claim to the accuracy of information on this site is made and you are strongly advised to verify information presented here with a qualified advisor before making any financial decisions based on this information.