Confused by all these mortgage terms?


Confused by all these mortgage terms?

Fixed Rate. Variable Rate. Interest Rates. SVR.

What do all of these things mean? Do not worry! Next Home Mortgages are here to help!

Mortgage Interest.

This is the amount that is payable over the term in addition to the actual amount you are borrowing for your home. Almost like the price you pay for the bank lending you the money. For instance if the interest rate is 2.5% on £100,000 then the total amount payable is 102,500 over the period of your mortgage which, could be around 35 years.

Fixed Rate.

This one is maybe quite self explanatory. This is where the interest rate you pay on the amount you borrow stays the same for a fixed amount of time. Often 2 or 5 years. Here at Next Home Mortgages we would recommend that you always try and stay on a Fixed Rate term as then you know what you’re paying every month so you can budget and if there is ever a spike in interest rates you won’t suddenly get stung by an increase and struggle to pay your mortgage!

Variable Rate.

This one is the opposite. This is where the rate isn’t fixed so, it could alter. These ones tend to be favourable to the lender. So, they tend to charge you more for lending you the money. They can go up or down. Only really something to use if you have spare money each month as a safety net in case there is a spike. This one is also called a tracker rate. This is because it tracks the Bank of England base rate.

SVR.

This is something that a bank will switch you to once your fixed term rate runs out. This interest rate is often a lot higher than you will have previously been paying. Not good! If your fixed term is about to run out, then give us a call!

 

Here at Next Home Mortgages we try our hardest to achieve the best results for our clients and to help you select the best products for you whether that’s mortgage rate, providers or insurance policies – you are our No.1 priority! We guide you through each step of your mortgage process and even after you are all moved in and cosy we stay in touch every 6 months to make sure you’re happy with everything and we always be in touch in time to help you renew your mortgage rates and insurance policies! We are Your Team For Life. Call our dedicated team today on: 01738 45 90 69.