Top 10 UK Mortgage Features to Consider

Quick Move Now are not financial advisers and do not dispense mortgage advice. However, we are up to speed on some of the elements of the subject, and this top 10 is a general guide to the most important UK mortgage features to consider.

1. Repayment mortgage

This is the old fashioned, traditional type of mortgage and remains the only way the property is actually guaranteed to be yours at the end of the mortgage term - provided you have repaid the loan. Your mortgage debt is divided into capital repayments (ie repayment of the money you borrowed) and interest payments (ie repayment of the interest you're being charged for the loan). As you pay off your mortgage every month you're paying off a bit of capital and a bit of interest until the full debt is repaid.

2. Interest only mortgage

As the name suggests, with an interest-only mortgage, the monthly payment includes only this element of the debt. The upside of this is that the monthly cost is considerably lower than for a comparable repayment mortgage. The downside is that at the end of the mortgage term you still owe the original amount you borrowed. And if you can't repay it, your mortgage lender is perfectly entitled to repossess your home.

3. Fixed rate mortgage

This type of mortgage is where you and the mortgage lender agree to fix the interest rate owed on your loan for a set period of time. The period of time is usually between 1 and 5 years but could be longer. (That simply depends on the exact mortgage deal you choose). After the agreed period, the interest rate owed on your loan usually reverts to the lender's Variable Rate.

4. Tracker mortgage

Tracker mortgages are those that track the Bank of England’s Base rate, whatever rate it is may be. They can last a few years, where the rate reverts back to the lenders standard rate after a period, or can be for the entire length of a mortgage, when it’s called a lifetime tracker.

5. Capped mortgage

A variation on interest only mortgages, capped mortgages have a limit, or cap, on the amount of interest you will pay over a particular period of time while allowing it to fall if the variable rate drops.

6. Muslim mortgage

A large Muslim population in many cities in the UK now means many lenders are offering Muslim mortgages. These are ones that comply to Sharia Law.

7. Portability

This refers to the practice of transferring your mortgage between properties when you move house, but staying with the same lender. Mortgage portability can be advantageous, if for example you have secured a good fixed rate, a capped, cash back or discounted product originally and the market has since changed, leaving no comparable deals.

8. Buy-to-let mortgage

Designed for those who want to buy a house with the intention of letting it out to tenants. Buy-to-let-ers can be private investors looking to make some money in property, or professional companies similar to Quick Move Now. Buy-to-let mortgages normally require a 15% deposit and home ownership.

9. Early repayment charge

A charge levied by lenders to borrowers who repay their mortgage early, or transfer it to another lender. Early repayment charges can be a percentage of the mortgage left to pay, a percentage of the initial loan amount, a certain number of months interest or a percentage of the total sum already repaid.

10. Valuations

Before approving your mortgage application, the lender will want to check the property's value. To do this, the lender will usually arrange for a qualified valuer to inspect it. You normally have to pay for the valuation, even if you do not go on to buy the property. However, some lenders do not charge for valuations, so check.

This article was written by Quick Move Now who are one of the leading house buying companies in the UK. They specialise in providing a quick house sale and will buy my house quickly. They will buy your house for 90% of its value and can turn around in 7 days.