The Different Types Of Mortgage Deals

Thinking of buying your own home but don't know which mortgage deal to take? There are a number of ways that mortgages can differ including whether they offer fixed rates, variable rates, product fees, flexible repayment dates and terms.

Fixed rate mortgage deals are those which have a set interest rate applied to them, for a fixed amount of time. How long a fixed rate can be applied to a mortgage depends on how large a deposit was initially made. A fixed rate mortgage will not fluctuate, there will be set payment amounts each month (as long as payments are made in full and on time).

Variable rates follow the fluctuations of the Bank Of England's rate. Mortgage rates will below, when the Bank Of England's rates are low. If the rate increases, payment requirements will also increase in line with this. Variable rates are available for differing lengths of time dependent on the amount of the initial deposit.

It is also possible to get interest only loans, repayment loans, or part interest, part repayment mortgage deals to suit a variety of lifestyles and income levels. Mortgage terms and payment dates  are relatively flexible. If lower monthly repayments are desired, longer mortgage terms will work out better. If paying off the mortgage in full as soon as possible is desired, then shorter terms work out better. Payment dates can normally be chosen by the mortgage borrower to reflect the time of the month they are most comfortable paying back the loan e.g. after payday. It can also affect the interest attached to the first monthly repayment.

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