Interest Options

Fixed Rate

When you take out this type of mortgage, the interest rate is fixed – typically for a term between one and three years. This means that, unless you make changes to your mortgage such as borrowing more money or making a part repayment, your monthly payments won’t change until the deal comes to an end. Fixed rate deals may be slightly more expensive than other options, but you have the reassurance of knowing that your payments won’t change for the fixed period, even if market conditions change and interest rates rise.

Capped

On a capped mortgage, the interest rate – and therefore your monthly payment – is variable, but is guaranteed not to rise above the agreed rate cap for the term of the product. This means your payments may go up or down, but will never exceed a certain maximum.

Tracker

Tracker rates are usually linked to the Bank of England base rate, and your mortgage rate (and monthly payments) will increase or decrease whenever the base rate changes. Be aware that although the Bank of England rate has been consistently low for the past few years, this may not always be the case. Also, note that some lenders link tracker mortgages to their own bank’s base rate which can change whenever they choose.

Other types of mortgage, including interest only, cashback or offset mortgages are available from some lenders. Just Mortgage Brokers can provide advice on all mortgage types, including adverse credit, buy to let and Help to Buy mortgages.