Robyn Seymour - Mortgage Loans and its 15 Types

Ranging from Standard Variable Rate mortgages to more unconventional mortgages such as self certification and Current account mortgage there are about 15 types of mortgage are available in UK.

Standard Variable Mortgage: The most common type of mortgage. Mortgage payments depend on the lenders SVR. This is usually influenced by the Bank of England Base Rate.

Fixed Rate Mortgage: A mortgage with a period of 2-4 years where the interest rate on mortgage payments is fixed. There may be a slight premium for security, but it avoids interest payments becoming unaffordable.

Capped Mortgage: This is like a fixed rate mortgage. It states a maximum interest rate but it can fall under some circumstances.

Self Certification Mortgage: A mortgages where there is not any needs to prove your income through published accounts. Often taken by self employed.

Repayment Mortgage: A mortgage where you pay both, interest on the loan and capital repayments. Most mortgages are repayment mortgages. It means at the end of your mortgage term you will have paid off your mortgage debt.

Interest Only Mortgage: Mortgage where you only pay interest on loan and do not repay any capital. This requires a separate investment plan to be able to pay off the mortgage capital at the end of the mortgage term

Investment Mortgage: A type of interest only mortgage but where taking out a mortgage also involves taking out a complementary investment plan to be able to pay off the mortgage debt.

Endowment Mortgages: Similar to an investment mortgage. There were many problems with endowment mortgages in the UK because often the investment failed to be sufficient to pay off debt.

Base Rate Tracker Mortgage: Similar to a standard variable rate mortgage. This is a mortgage where the interest rate is fixed to a certain discount compared to the Bank of England Base Rate

100% and 125% mortgages: Usually it is necessary to pay a deposit of up to 10% of the house price. However with rising house prices many lenders are now offering a mortgage for the full amount. In some cases lender offer more than 100% to enable spending on the house itself.

Joint Mortgage: A Joint mortgage involves buying a house with others to increase the chance of getting a mortgage. Also known as co buying mortgages.

Adverse Credit Mortgages: Help for people looking for mortgages with bad credit ratings

The Never Ending Mortgage: A new and quite small type of mortgage where there is no necessity to pay off the mortgage at all. Instead you can pass your mortgage onto your children.

Reverse Mortgage: This is where you can receive income from the value of your house in return for the lender receiving an increasing share of the value of your house.

Buy to Let Mortgages: This involves getting a mortgage to buy a house with the specific intention of renting it out. These mortgages are more dependent upon the state of the Housing market

Offset / Current Account Mortgage: This is when your mortgage is combined with your current account at a bank or building society. Your mortgage interest payments are reduced and also the mortgage capital you owe if you have a current account.

Mortgage Loans and its 15 Types

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