Choosing the right mortgage deal

There are a number of different types of mortgage, but not all of them may be available to you, depending on your situation. For example, first-time buyers, people who want to change their mortgages, and those who are moving house might all be offered different deals by their lenders.

Normally, mortgages start off at an initial interest rate, which can last for up to five years, before they change to a standard variable rate. It is, however, possible to opt for either a variable or fixed-rate deal. If you choose a fixed-rate mortgage, this means you always pay the same rate of interest throughout the deal.

Choosing a variable-rate mortgage means that your rate will change but it could be a tracker deal, in which your interest rate follows the base rate set by the Bank of England, or a discounted deal. Discounted deals generally track your lender’s standard variable rate, but they may have a cap above which they must not rise, or a rate that they cannot fall below. Alternatively they may be stepped, with a lower rate being paid for a set period at the start of the deal.

Flexible mortgages are another option, allowing you to make withdrawals, take payment holidays, under and overpay, but they can be more expensive. Whatever mortgage you think might suit you best, it is always worth taking professional advice before making your choice. If you are interested in the mortgage industry, you could even take a CeMAP course and become a mortgage adviser, helping other people to work out which deal is best for their needs.



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