Compare different types of mortgages available including the best fixed rate mortgages, flexible mortgages and tracker mortgages

Below are some bullet points to give you a overall idea of the basic requirements and understandings towards some of the most common types of mortgages taken out today.

Fixed Rate Mortgages

The key benefits of a fixed rate mortgage:

•  Know exactly where you stand.

•  Giving you the peace of mind in knowing what you need to budget for.

•  Fixed for a set period at time regardless to changes in the Bank of England base rate or the lenders standard variable rate changes.

•  ALSO NOTE: For the term you are on a fixed rate mortgage, when interest rates fall you may miss out on a reduction in your monthly payments.

•  At the end of the fixed rate period, your interest rate will change to a variable rate.

•  An Early Repayment Charge may apply if the mortgage is repaid during the special rate period.

 

Tracker mortgages

The key benefits of tracker mortgages are:

•  They follow the mortgage providers standard variable rate or The Bank of England base rate or your mortgage providers chosen anchor rate (to understand what anchor means: it is the interest rate that applies to wherever your mortgage company borrows it's money from .) Yes many lenders have to borrow the money that they lend to you!!!!

•  If the base rate goes up, the interest you pay will increase, which means your mortgage payments will rise.

•  If the base rate goes down, the interest you pay will fall and so will your mortgage payments.

•  An Early Repayment Charge may apply if the mortgage is repaid during the fixed period.

 

Flexible Offset Mortgages

The key benefits of flexible mortgages are:

•  This type of mortgage is designed to accommodate your changing financial needs.

•  You can offset your savings, overpay, underpay or even take payment holidays.

•  You can also make penalty-free lump sum repayments.

The interest you pay is linked to the Bank of England Base Rate for the life of your mortgage.

Related Internet Links:

Financial Ombudsman Service | Office of Fair Trading | Financial Services Authority | Council of Mortgage Lenders