One minute guide to mortgages
Homeowners took out more than 606,300 mortgages in the UK last year, according to the Council of Mortgage Lenders (CML).
A mortgage is a loan used to buy property. There are several different kinds, and the type of mortgage suitable for you will depend on your circumstances and needs.
Currently, about a third of people with mortgages have loans where the interest rate is fixed, according to the CML. The other two thirds have variable rate mortgages, which means the interest rate can go up or down.*
However, fixed-rate mortgages have been very popular with new borrowers recently.
In May, 89% of borrowers taking out a mortgage chose a fixed-rate loan. A further 5% chose tracker mortgages, where the interest rate moves in line with another rate, usually the Bank of England base rate. Only 2% went for discount rate deals and another 2% took out loans at standard variable rate.
Here’s a quick overview of mortgages available:
*Source: CML release 26 June 2014: “Profile of existing mortgage holders: Approximately 35% on fixed rates, 65% on variable rate products”
All information accurate at time of publication
This article is provided by the Money Advice Service.