Mortgage types explained

Essential mortgage information simplified.

How mortgages work

Mortgages are a way to borrow money to buy property. You can get a mortgage to buy a home to live in or a residential property to rent out.

Mortgages are secured against the property you’re purchasing until you’ve repaid what you borrow in full. If you fail to repay the mortgage, your lender can repossess the property and recover their money by selling it. 

Due to the fact that mortgages are backed by an asset, the duration of mortgage terms is typically longer compared to other types of borrowing, often ranging from 25 years and, in some cases, extending up to 40 years.

Just like when you borrow money, mortgage lenders charge something called interest. At first, when you start paying off your mortgage, a bigger part of your monthly payments will go towards paying the interest, and a smaller part will go towards actually reducing the loan amount you owe. 

As you make payments on your mortgage, the amount you owe will decrease over time. This means that a larger portion of your monthly payment will be allocated towards paying off the loan itself, and less will go towards the interest.

Mortgage types explained

Fixed-rate mortgages are one of the most popular types of mortgage. They allow you to fix your interest rate for a specified period, typically two, three or five years, though some lenders will allow you to fix it for up to 10 years.

Fixed-rate mortgages can help you to budget because your mortgage payments will remain the same for your fixed period. During this fixed period, you’ll be protected from the effects of interest rate rises, but you won’t benefit if interest rates fall.

Variable-rate mortgages allow your mortgage lender to change the interest rate throughout your mortgage term. All lenders will have a standard variable rate (SVR) that fluctuates over time based on changes in the market; as interest rates rise you’ll be charged more interest, but when they fall, you’ll be charged less.

Most borrowers tend to avoid SVR mortgages because they often charge higher rates of interest than other mortgage types.

Tracker mortgages follow the Bank of England base rate. This means that if the base rate rises, so will your monthly interest, but if it falls, your interest rate will follow suit.

Typically, a tracker mortgage will be base rate plus a certain percentage, for example, base rate plus 1%. In this case, if the BofE base rate were 4%, your interest rate would be 5%. 

Discounted variable rate mortgages link to the mortgage lender's standard variable rate (SVR). They have a discounted rate for a certain amount of time, usually between 2 and 5 years.

These mortgages usually have the lowest interest rates and smallest monthly repayments, which can be appealing to first-time buyers. However, interest rates and monthly repayments can go up or down at any time so do bear this in mind.

Discover how lenders can support you with more complex mortgage requirements, such as being self-employed or wanting to use a family member as a guarantor. There are many unique and common ways to help first-time buyers get onto the property ladder. Here, you'll learn all about specialist mortgages.

Getting a mortgage is a big financial decision; you’ll need to consider whether you can afford to keep up repayments for the foreseeable future and if interest rates were to rise in the future. 

It’s worth taking the time to research your options and make sure you have a reasonable deposit and good credit history before applying for your mortgage. Our expert mortgage brokers can help you find the right mortgage deal for you, taking into account your circumstances.

Jonathan Bone - Lead Mortgage Adviser

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Mortgage FAQs

There are a number of factors that can affect your ability to get a mortgage. All lenders will have their own eligibility criteria, meaning you may be rejected by some lenders but accepted by others. 

Typically, your eligibility for a mortgage will be based on the following factors:

  • How much you want to borrow

  • How much deposit you have 

  • Your monthly income

  • Your monthly outgoings

  • Your employment status

  • Your credit history

  • The property you want to buy - some lenders won’t offer mortgages on listed buildings, high-rise flats or homes made from non-standard materials, for example.

To increase your chances of successfully getting a mortgage, it’s a good idea to use a mortgage broker. Our expert mortgage brokers compare thousands of deals from over one hundred different lenders and can help you pick the right mortgage deal for your circumstances.

Once you’ve found the right mortgage deal for you, it’s time to start the application process. When you apply for a mortgage, the lender will run a hard credit check to find out how you’ve managed credit in the past and double check there’s nothing in your credit report that would mean you’re not eligible. 

You’ll need to provide some documentation with your mortgage application. The exact documentation you’ll need will vary depending on the type of mortgage you’re applying for, your financial situation and your lender, but will typically include:

  • Bank Statements (typically from the last three months) - Lenders will use these to look at your regular outgoings and whether you’re able to afford the monthly repayments. 

  • Proof of Income - This will typically be payslips from the past three months. Lenders can also request to look at your bank statements to assess whether you have a regular income to cover your monthly payments. 

  • Proof of ID - Such as your passport or driving licence.

  • Proof of address - Such as a recent utility bill, council tax bill or bank statement. Any documents you supply for proof of address should be dated within the last three months. 

Proof of deposit - You’ll need to prove where your deposit came from. If you’ve saved your deposit and are currently holding it in a savings account, you’ll need to provide a bank statement for this savings account, you may be asked about any significant deposits into the account. If you’ve been gifted the deposit, you may need a signed letter from the person gifting you the deposit.

Buying a house and applying for a mortgage can often be a lengthy process, but the actual time it takes to apply for a mortgage will vary. 

How long your mortgage application takes will depend on a variety of factors, such as the complexity of your financial situation, the efficiency of the lender and also how quick you are at responding to any queries your lender or broker may have. 

When you apply for a mortgage through, your case manager will be on hand to help you through the whole application process, chasing the lender when necessary and keeping you informed every step of the way.

Mortgage offers are only valid for a fixed timeframe. This will vary between lenders but mortgage offers typically last between three and six months. 

If completion on your new property is delayed, you may be able to ask your lender to extend your mortgage offer for a further three to six months, but you may need to reapply for the mortgage if your offer isn’t extended.

Typically mortgage terms are between 25-35 years, but there are some lenders on the market who offer mortgages over 40 years. The mortgage term you’re able to get is likely to depend on your age; for example, if you’re an older borrower, you may struggle to be approved for a lengthy mortgage term.

How do I get the best mortgage rates?

The interest rate you receive on your mortgage can be influenced by various factors. Following the steps below will help you to get the best mortgage rates for your circumstances: 

  • Use a mortgage broker: Our expert mortgage brokers will be able to help find the right mortgage deal for you.

  • Work on your credit score before you apply: Your credit score will impact the mortgages you’re eligible for, and like most borrowing products, the best rates are typically reserved for reliable borrowers with a good credit history. 

Having a reasonable deposit: The Loan-to-Value (LTV) of your mortgage, how much you borrow vs the value of your house, can have a significant impact on the mortgage rates you’re offered. Borrowers with larger deposits typically pose less risk to the lender because the property's value is significantly higher than their investment, and you’re less likely to fall into negative equity if house prices fall.

A mortgage deed is a legally binding contract between you and your lender, which is secured against your property. When you successfully apply for a mortgage, you’ll need to sign your mortgage deed. 

A mortgage deed outlines the conditions of your mortgage, the total amount you’ll need to repay and the terms of the mortgage loan. You’ll need to sign a new mortgage deed if you remortgage your property.

There are some circumstances where a mortgage offer can be withdrawn, typically when you have a change in circumstances, such as losing your job, the lender finds you’ve given inaccurate or false information on your application or if the surveys carried out find an issue with the property you wish to purchase. 

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Important info & marketing claims

You may have to pay an early repayment charge to your existing lender if you remortgage. Your savings will depend on personal circumstances.

Your home may be repossessed if you do not keep up repayments on your mortgage.

*The savings figure of £656 is based on remortgage customers in April 2024. Read more on our marketing claims page.

We can't always guarantee we will be able to help you with your mortgage application depending on your credit history and circumstances.

Average mortgage decision and approval times are based on's historic data for lenders we submit applications to.

Tracker rates are identified after comparing over 12,000 mortgage products from over 100 mortgage lenders.

As of January 2023, has access to over 100 lenders. This number is subject to change.

For buy-to-let landlords, there's no guarantee that it will be possible to arrange continuous letting of a property, nor that rental income will be sufficient to meet the cost of the mortgage.