Welcome to Mortgages Review, your one stop guide to lead you through all aspects relating to mortgages and the mortgage market in the UK. We know that to the untrained eye the world of mortgages can seem a daunting and confusing place which is why we’ve created this resource to make the whole process easier for you. Whether you’re after a variable rate, a fixed rate or a tracker, or whether your a first-time buyer or looking to buy-to-let, all the information you need can be found here at Mortgages Review.
To begin with let’s consider what a mortgage actually is. A mortgage is, put simply, a loan secured by property. In most cases this loan is used by the borrower to purchase the same property which the loan is secured against and in many countries around the world, including the UK, its is the most common mechanism for people to buy their homes. The risk when taking out a mortgage is that if the borrower is unable to keep up with the repayments then the lender may be able to take possession of the property to settle the debt.
As with most loans the borrower is required to pay a rate of interest on the mortgage and as such mortgages are usually structured as long-term loans with periodic (usually monthly) payments over, say, 10-30 years (depending on the borrowers income and the value of the property etc). This rate of interest will usually tied in some way to the Bank of England’s base rate (the rate set by the Bank’s Monetary Policy Committee every month) either directly, through a tracker mortgage or via the lender’s own standard variable rate.
In the UK the mortgage market is unique in that it is one of the most innovative and competitive in the world. This is due the low levels of regulation and government intervention in the sector leaving most mortgages to be funded by private banks and building societies. The high levels of competition mean lenders are constantly trying to out do one another to attract new customers and has led to a substantial amount of diverse and innovative types of mortgage being on offer. These may include mortgages which are fixed at a certain rate for a set period then revert to a variable rate, mortgages which directly track the Bank of England’s base rate, mortgages which offer a discounted rate for a set period or even cash back mortgages where a lump sum of cash is provided to the borrower at the beginning of the agreement in exchange for a higher rate of interest to be paid for the length of the loan. In truth, however, the vast majority of mortgages will eventually revert back to a variable rate of interest and it is important not to be sucked in by ‘too good to be true’ introductory offers and look closely at the amount you are being asked to repay over the life of the agreement.
Seeing as virtually all of the UK’s major financial institutions offer mortgages as a major component of their business you will already be familiar with many of the top mortgage providers but they include each of the “big five” banks: HSBC, NatWest. LloydsTSB, Barclays and Royal Bank of Scotland as well as the largest building society: Nationwide. In addition to this mortgages are also provided by various other financial organizations including Santander, Cheltenham and Gloucester, Woolwich, ING Direct, Halifax and many more. The good news for you is that you’ll be able to find information about all of these lenders and what they have to offer right here at Mortgages Review.