Types of Mortgages Kylie's Mortgage Podcast

In today's show, I will be talking about three types of mortgage and I want to start off by saying these are not the only three types but they are the three types which you will come up against when you are doing your research or when you are looking into mortgages in general.

For today’s episode I am going to be talking about; Fixed-rate, The standard variable rate and

Tracker mortgage.

I would consider today's episode to be a little bit of a building block episode. By listening to all the episodes in this podcast, you will begin to build up your mortgage knowledge and if this is your first episode then please do feel free to go back to the episodes which you missed so that you can catch up on all the other information which has already been covered off.

Understanding mortgages really is not that complicated, it just takes a little effort on your part to put in the time to find out more about the subject… which is very much the same as most other topics.

When it comes to mortgages one mini topic to get clear in your mind is understanding the different types of mortgages which are out there and how one option may be better for you and your situation than all the other types.

Now if you are in the market for a mortgage and you are choosing to use a mortgage adviser then this episode will very much go hand in hand with the advice process and the adviser's role and your knowledge around this issue will be cemented in when you speak to your adviser.

If on the other hand, you are not going down that route then it may be worth just making sure you fully understand the differences between these options and how these will affect you throughout the life of the mortgage.

Firstly we have the Fixed Rate mortgage

This is likely to be the mortgage type which most people will be familiar with either with a residential or buy to let mortgage. I would say the most common solution for people with fixed incomes and it is a very common option for first-time buyers who want to make sure that they can budget their incoming and outgoings.

Mortgages that are sold with a fixed rate mean that the interest rate is fixed and will not change during the time for which they are fixed. Sounds simple enough… So for example, if you are looking at mortgage deals and rates at the moment and you spot one that is described as being a 2 year fixed rate then for the next two years of this mortgage you will know what your mortgage payments are going to be. Now some lenders do have a fixed date which will be around two years but very close to two years as in this example so you should just keep that in mind.

Fixed-rate mortgage can be 2 year, 3 year, 5 year 7 year 10 year and by now I am sure you are getting where I am coming from. These fix rate products are great if you would like to fix your payments on your mortgage and don’t imagine too much is going to be changing with your current situation. While the fixed nature can be useful it is also worth remembering that these products do also come with a certain degree of flexibility built into them in that some fixed products do allow you to port or take your mortgage with you when you move. You can also make overpayments on your mortgage if the lender and product allows which will often be restricted to an upper cap of 10% of the mortgage balance but it's important to check the details with your lender before making large overpayments on your mortgage. A standard variable rate mortgage is the type of mortgage you would have likely fallen onto because your fixed-rate mortgage has come to an end. Thank you so much for listening I have been Kylie Meade-Richards and I'll see you next time