Everything you need to know about mortgages: how to get one, how much you can borrow and finding the best deals
In this mortgages guide:
Includes how long it takes to get a mortgage
Includes stamp duty calculator
fixed rate mortgage
variable rate mortgage
discounted variable rate mortgage
first time buyer mortgage
buy to let mortgage
bad credit mortgage
interest only mortgage
combined repayment and interest only mortgage
Explore mortgage deals, guides and calculators
What is a mortgage?
A mortgage is a loan you use to buy a property. You usually pay back the amount you borrow as well as interest.
The amount of interest you pay depends on:
the interest rate you’re on
how long your mortgage is for
The interest rate you pay can be affected by:
the size of your deposit
how you’ve managed debt in the past
the type of mortgage you choose
You pay back part of your mortgage every month for a certain number of years. Most people take out their first mortgage for 25 to 30 years.
You won’t have the same mortgage lender all that time.
This is because many mortgages have a reduced rate for a certain period, often for at least two years.
When that period ends, people tend to switch to another mortgage that has an initial reduced rate.
Switching mortgage lenders is called remortgaging.
If you don’t pay your mortgage, your lender could take your home from you.
If they did, it would be much more difficult for you to get another mortgage.
How to get a mortgage
It can take from a few weeks to several months to get a mortgage. Here’s how.
Step 1. Work out how much you can borrow
Use our mortgage calculator to work out how much you could borrow.
You’ll need to put in:
Once you know how much you could borrow add up the other costs such as:
Some brokers, like Trussle, don’t charge a fee.
A broker can give you a much more accurate figure of what you could afford than a mortgage calculator.
Read our mortgage broker guide to find out more.
Step 2. Get a Mortgage in Principle (MIP)
This is also called an Agreement or Decision in Principle.
It’s a statement, from a lender or a broker, saying that a lender could lend you a certain amount of money.
When you make an offer on a home you’ll probably need to show your MIP to the estate agent. It shows them that you could, in principle, get a mortgage.
Get a free Mortgage in Principle from Trussle online in minutes.
Step 3. Look for a home
Use websites such as Zoopla or Rightmove to find homes you can afford and go and see them.
Don’t wait for the perfect property as you may never find it.
Make an offer that suits your budget.
Step 4. Choose your mortgage
Get in touch with your mortgage broker or lender when a seller accepts your offer.
A broker has a much wider choice of deals than a lender. A lender can only offer you their mortgages.
Trussle works with 90 lenders offering about 12,000 deals.
Step 5. Find a solicitor
A solicitor who deals with buying a home is also known as a conveyancer.
It’s a good idea to ask around for a recommendation as there can often be problems when buying a property.
And some solicitors are much more expensive than others.
Your mortgage broker or estate agent may also suggest one, but you don’t have to use them.
Step 6. Apply for your mortgage
Give your broker the documents they need so they can apply for your mortgage.
As well as bank statements, they’ll need proof of:
The lender will look at your application and do a credit check.
Read our credit score guide to learn more.
Step 7. Get a valuation
A lender needs to value the property to see how much it’s worth in case they have to sell it if you don’t pay your mortgage.
There’s a chance they decide the property isn’t worth the price you’re paying for it.
This is known as a downvaluation and it could affect your mortgage.
The lender also needs to make sure that your home meets certain rules set out in your mortgage.
Speak to your broker if you’d like a more detailed survey done.
Step 8. Get your mortgage offer
This is when the lender agrees to give you the mortgage you asked for.
Step 9. Exchange contracts
Your solicitor and the seller’s solicitor will exchange your contracts. The only thing you need to do is sign yours.
Both solicitors will also find a date when you get the keys to your new home.
This is when the property is finally yours and is known as completion.
Step 10. Move into your new home
Pick up the keys from the estate agent and make yourself at home.
How much mortgage can I get
You can usually borrow around 4 to 5 times your salary.
Lenders have different rules and the amount they times your income by can depend on a number of things.
Find out more about how much mortgage you can get.
How much mortgage can I afford
Mortgage calculators will give you some idea of how much you might be able to borrow.
But there are some things that mortgage calculators don’t take into account.
Get a much more accurate figure of how much you could afford to borrow.
Most basic mortgage calculators, including our mortgage calculator, are affordability calculators.
They tell you how much you may be able to borrow with a mortgage.
Try our mortgage calculator to see how much you could borrow.
How much a mortgage costs
The true cost of your mortgage is your monthly repayments, plus fees and charges, minus any cashback.
You can calculate your monthly repayments with our mortgage calculator.
Before choosing a mortgage, it’s very important to know exactly how much you’ll pay for it in the long run.
Here are some of the fees and charges you might have to pay.
Early repayment charge
You might have to pay a charge if you remortgage before your current deal ends.
Cost: up to 5% of your mortgage balance
Arrangement fee or product fee
This is what you have to pay simply for taking out the mortgage.
Cost: often around £1,000
Booking fee/reservation fee/application fee
This is the cost of applying for a mortgage.
Cost: £100 to £200
A lender has a valuation done to check what your house is worth in case it needs to sell it if you stop paying your mortgage.
It also needs to make sure that your home meets certain rules in the mortgage.
Cost: free or around £300
Chaps fee (or funds transfer fee)
This is for sending the mortgage funds to you or your solicitor.
Cost: around £30
Deeds release fee/mortgage completion fee/redemption administration fee/discharge fee
This is for ending your mortgage.
Cost: from £50 to £300
These are the legal fees.
Cost: £850 to £1,500
Unlike Trussle, some brokers charge a fee. It can be a set amount or a percentage of your mortgage.
Cost: free or around £500
Stamp duty is a land tax. How much you pay depends on how much you pay for your home and where it is.
It’s often the second biggest cost of buying a home after your mortgage.
See our stamp duty calculator guide to know more.
And use our stamp duty calculator to find how much stamp duty you need to pay.
Mortgage types and products
If you’re buying a property there are a lots of different types of mortgages and products you can choose from.
The best for you will depend on things like:
whether you plan to live in the property or rent it out
how long you plan to live there if it's your next home
affording your mortgage if it goes up
If you’re not sure which mortgage or product is right for you speak to a mortgage broker.
Fixed rate mortgage
A fixed rate mortgage lets you fix your mortgage rate from between 2 to 15 years.
This means that your repayments will stay the same during that time.
You’ll need to think carefully about how long to fix your mortgage rate. What’s best for you will depend on your personal situation.
The interest rates of fixed deals are usually higher than those of discounted variable rate deals.
See our fixed rate mortgage guide to find out more.
Variable rate mortgage
Tracker mortgages follow the Bank of England’s interest rate and are often a certain percentage above it.
Your monthly repayments can go up or down.
Discounted variable rate mortgage
Discounted variable rate mortgages are linked to your lender's standard variable rate (SVR).
The rate is discounted, usually between 2 and 5 years.
These mortgages usually have the lowest interest rates and smallest monthly repayments.
Your monthly repayments can go up or down.
First time buyer mortgage
First time buyers usually take out the same type of mortgages as everyone else.
But lenders often give first time buyers special deals, such as cashback and fee free mortgages.
See our first time buyer guide to find out more.
Buy to let mortgage
If you buy a home to let, you’ll need a buy to let mortgage.
And if you rent out the home you normally live in, you may have to switch to a buy to let mortgage from a residential one.
There are important differences to a buy to let mortgage:
the fee the lender charges to get one is usually higher
interest rates are normally higher
the minimum deposit is normally around 25% of the property's value
See our buy to let mortgage guide to find out more.
Bad credit mortgage
There’s no such thing as a bad credit mortgage. But there are lenders who specialise in helping people with bad credit get a mortgage.
These mortgages can be more expensive.
If you’ve got bad credit you apply for a normal mortgage.
Lenders will look at your credit score, and other information, and decide whether to give you a mortgage.
Read our bad credit mortgage guide to find out more.
Interest only mortgage
With most mortgages you pay back part of the loan each month, as well as interest.
If you take out an interest only mortgage, you only pay the interest each month.
This means your monthly payments will be smaller than if you take out a normal repayment mortgage.
You need a plan in place to pay off all the loan when your mortgage ends, such as selling your home or an endowment.
Find out more with our interest only guide.
Combined repayment and interest only mortgage
With this sort of mortgage you pay the interest each month and only part of the loan.
You have to pay the rest of the loan in one go when your mortgage ends.
Some mortgage deals let you pay more or less each month.
Paying more than you need to can be a good idea as you’ll pay less interest in the long term.
Sometimes you can stop paying your mortgage for a while, which is called a payment holiday.
A lifetime mortgage is a loan you take out of your home.
The loan, and the interest, is paid off when your home is sold when you die or you’re moved permanently into residential care.
See our lifetime mortgage guide to find out more.
With an offset mortgage your mortgage is linked to your savings account.
Instead of earning interest on your savings, you pay less interest on your mortgage.
If you have a £150,000 mortgage and £30,000 in savings, for example, you’d only pay interest on £120,000.
Your monthly repayments will probably be based on the full £150,000, so you’d overpay each month and pay off your mortgage quicker.
pay off your mortgage quicker
pay less interest in the long run
pay less tax because you don’t earn any interest if the money is offset against your mortgage
Best mortgage deals
It can be difficult to work out which mortgage deal is best for you.
Read our compare mortgage rates and deals guide to help you find the right one.
A house deposit is the money you pay towards your home before you start paying the mortgage.
It’s a percentage of the total house price and you usually have to pay at least 5%.
It is possible to get a mortgage with no deposit.
Read our house deposit guide to find out more.
When the initial period of your deal ends, your lender will move your mortgage onto their standard variable rate (SVR).
This will usually make your monthly payments higher.
Research for the Trussle Mortgage Saver Review 2018 found that the difference between a market leading deal and the average SVR is around £4,700 in interest a year.
It’s a good idea to start looking for a new mortgage deal 3 to 6 months before your lender moves your mortgage onto their SVR so you’ve lots of time to switch.
See our remortgage guide to find out what to do.
Government Help to Buy scheme
Help to Buy is one of a number of schemes the government offers to help you buy a home.
Help to Buy Equity Loan
Use our government homeownership tool to find out which one would suit you best.
And read our government homeownership guide for more information about each one.
Mortgage with arrears
Talk to your lender if you fall behind paying your mortgage.
They might allow you to:
pay your mortgage for longer
pay just the interest
have a mortgage holiday
Pay your mortgage for longer
If you took out your mortgage for 25 years, for example, extending it to 30 could reduce your monthly payments enough for you to manage them.
If you extend your mortgage, you’ll pay more interest in the long term.
Pay just the interest
You may be able to switch to paying just the interest for a short amount of time, rather than the interest and loan which is how most mortgages work.
This will also make your monthly payments lower, but you’ll need to decide how to afford the payments when they go up again.
Your lender might offer you a payment holiday, which means they'll let you stop making payments for a certain period of time.
This isn’t possible with all mortgages.
When the holiday ends, your mortgage balance will be higher because you haven’t been paying it off, so your payments will be higher too.
How many months in mortgage arrears before repossession
Lenders normally write to you 15 days after you’ve missed a payment.
Often they give you at least three months to sort out your payments.
If you’re still behind on payments by this time, your lender will consider other ways of getting their money back.
This includes repossessing your home.
If they decide to repossess your home, they’ll go to court to get a possession order.
If the court gives your lender an outright possession order your lender has a legal right to own your home on the date given in the order.
If you don’t leave your home by that date, your lender can ask the court to evict you.
If they’re given a suspended possession order you’ll be able to stay in your home as long as you keep up with the payments set out in the order.
Can I sell my house with mortgage arrears
You can sell your home rather than risk your lender taking you to court.
When lenders sell a home, they prefer to do it quickly, so you may be able to get a better price doing it yourself.
You’d also avoid having a repossession on your records, which could affect your chances of getting a mortgage in the future.
If you want to put your home on the market speak to your lender to make sure you’re allowed to.
You can’t sell your home if your lender’s already been granted a repossession order by a court.
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Your home could be repossessed if you don't keep up repayments on your mortgage.
You may have to pay an early repayment charge to your existing lender if you remortgage.
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