Mortgages
Residential Mortgages

Residential mortgages are basically the standard older mortgages which have been given a new name. This means that a residential mortgage can be a more reliable, more flexible and also a more innovative mortgage products which often find solutions for all those people for whom a loan means freedom from a financial constraint.

The interest rates for these mortgages are still fairly low compared to other mortgage products which basically means that these mortgages are one of the more sought after. However, it is not that easy to find a good residential mortgage. In order to achieve this, the borrower must be aware of which mortgage product would suit their circumstances the best. Once they know what they want it will be easier to look around the market.

A Residential mortgage offers various mortgage products with different rates of interest, depending upon the individual circumstances of the applicant. The types of residential mortgage are – capped, fixed, variable, cash back, discounted and tracker.

A fixed residential mortgage basically has a fixed rate of interest for a certain length of time. After this period the rate normally reverts to a variable rate. With a fixed residential mortgage the borrower can enjoy the same interest rate even if the rates of interest increase. They will have the choice of being able to plan their budget in advance because they will be clearly aware of their monthly outgoings. However, there is an obvious disadvantage with these mortgages which is that the borrower will not be able to make use of any decreases in the interest rates.

With a Variable rate residential mortgages the rate of interest will increase and decrease according to the market changes with the interest rate. In other words, if the mortgages rate of interest decreases, the borrower will pay less. On the other hand, if the interest rates increase the borrower will pay more. If the mortgage borrower is unable to afford to pay the higher rates of interest, then they would be more suited to applying for a fixed rate mortgage. The Variable rate would be the mortgage lender’s variable rate which is linked to the Bank of England’s base rate.