Finding Your Mortgage and Keeping it Under Control

This market is a notoriously diverse arena to step into so you need to be well informed when it finally comes down to it. There are many different types of and all sorts of different rates so to help you find the best mortgage for you here's a guide to different types to help you get started or manage your current borrowing:

Fixed Rate:

Fixed rate mortgages are not affected by changes in interest rates so the current low rate of interest isn't something you need to obsess over. You will be paying the same amount every month regardless of any increases or decreases in the base rate of interest. The economy isn't an easy thing to predict so rather than 'gambling' at least you know what's coming out of your bank account each month. Fixed rate mortgages are the most popular type according to the Council of Mortgage Lenders.

Tracker:

This means that the interest you pay on your mortgage will track Bank Base Rate. At the moment you'll be benefitting massi vely from the record low interest rate of 0.5% and be extremely happy that the rate was held last week. However, as the economy begins to recover interest rates are bound to rise again and whether you're benefiting fully from these low rates depends on whether or not your agreement has minimum rate clause written in. With such low interest rates and the state of the economy a lot of lenders withdrew their tracker mortgages but a lot have been reinstated and some continued to offer but it's pretty unlikely you'll get away with one that tracks under the 0.5% interest rate!

Standard Variable Rate (SVR):

Standard variable rates are usually what you are placed on by your lender when your previous deal ends. The mortgage lender will decide the rate taking account of Bank of England base rate.

Throughout the economic dip of the last few years, having your applications approved has become increasingly hard. Many banks and building societies have added extra clauses and conditions to their products and even removed certain ones from their ranges. First-time buyers have had it harder than most and many have been forced out the market. However, signs are looking more positive and as the economy is stabilising so make sure you do your research properly.

Get mortgage advice or check out a fixed rate mortgage with Leeds Building Society.

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