Mortgages
At Polish Brokers, we understand that buying a home is one of the biggest financial decisions you'll ever make. That's why we're here to guide you through the mortgage process, ensuring you find the perfect mortgage solution tailored to your needs.
A mortgage is a loan secured against a property. It allows you to purchase a home without having to pay the entire purchase price upfront. Instead, you make regular payments to the lender over a set period, typically ranging from 25 to 35 years. This enables you to spread the cost of homeownership over time, making it more affordable.
Different Types of Mortgage Rates
When it comes to mortgages, there are several types of interest rates you may encounter:
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Fixed Rate Mortgage
With a fixed-rate mortgage, your interest rate remains the same for a set period, usually between two to five years. This provides stability and predictability as your monthly payments remain constant, regardless of any fluctuations in the market. -
Variable Rate Mortgage
A variable-rate mortgage means that your interest rate can fluctuate over time, often in line with the Bank of England base rate or the lender's standard variable rate (SVR). While this type of mortgage can offer lower initial rates, your payments may increase if interest rates rise. -
Tracker Mortgage
Tracker mortgages are linked to a specific base rate, such as the Bank of England base rate, plus a set percentage. As the base rate fluctuates, so too will your mortgage rate, meaning your payments could go up or down depending on market conditions. -
Discounted Rate Mortgage
With a discounted rate mortgage, you pay a lower interest rate for a set period, typically the first few years of the mortgage term. After the discounted period ends, your rate will revert to the lender's standard variable rate.
Understanding mortgage terms is crucial when navigating the homebuying process:
- Loan-to-Value (LTV): This refers to the percentage of the property's value that you borrow as a mortgage. For example, if you have a 10% deposit and need to borrow the remaining 90%, your LTV would be 90%.
- Mortgage term: This is the length of time over which you agree to repay the loan. Common mortgage terms range from 25 to 30 years, although shorter or longer terms may be available depending on your circumstances.
- Product Term: This is the length of time a specific mortgage deal, such as a fixed or tracker rate, is in place. After the initial product term expires, you may be placed onto the lender's standard variable rate (SVR) or have the option to remortgage to a new deal.
At Polish Brokers, our experienced team is here to help you navigate the complexities of the mortgage market. Whether you're a first-time buyer, looking to remortgage, or interested in buy-to-let properties, we're committed to finding the right mortgage solution for you. Contact us today to take the first step towards homeownership with confidence.