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
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 depends on:
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 will not have 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 remortgaging.
If you do not 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.
Work out how much you can borrow with our mortgage calculator.
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, do not charge a fee.
A broker can give you a much more accurate figure of what you could afford than a mortgage calculator.
Learn more in our mortgage broker guide.
A MIP is a document that says how much you could borrow, in principle.
There's no guarantee that you'll get a mortgage if you get a MIP or a mortgage for that amount.
MIPs are useful to have as sometimes an estate agent will want to see one before they pass on your offer to a buyer.
Get a free Mortgage in Principle from Trussle online in minutes.
Use websites such as Zoopla or Rightmove to find homes you can afford and go and see them.
Do not wait for the perfect property as you may never find it.
Make an offer that suits your budget.
Contact 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.
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 do not have to use them.
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.
Learn more in our credit score guide.
A lender needs to value the property to see how much it’s worth in case they have to sell it if you do not pay your mortgage.
There’s a chance they decide the property is not worth the price you’re paying for it.
This is 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.
This is when the lender agrees to give you the mortgage you asked for.
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.
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 depends on many 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 do not take into account.
Get a more accurate estimate 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.
See how much you could borrow using our mortgage calculator.
How much a mortgage costs
The true cost of your mortgage includes monthly repayments, plus fees and charges from the lender for getting a mortgage.
You can calculate your monthly repayments with our mortgage calculator.
Before you choose a mortgage, it’s important to know the total cost.
Here are some of the fees and charges you might have to pay.
You might have to pay a charge if you remortgage before your current deal ends.
Cost: up to 5% of your mortgage balance
This is the fee for taking out the mortgage.
Cost: often around £1,000
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. This is 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
This is for sending the mortgage funds to you or your solicitor.
Cost: around £30
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
Mortgage types and products
If you’re buying a property there are lots of different types of mortgages and products you can choose from.
The best for you will depend on things like:
if 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.
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 about how long to fix your mortgage rate. What’s best for you will depend on your personal situation.
Fixed deal interest rates are often higher than discounted variable rate deals.
Learn more in our fixed rate mortgage guide.
A variable rate mortgage has an interest rate that can change. This is the same for tracker mortgages or discounted variable rate mortgages.
This means your repayments can go up or down.
Usually the rate is higher than the Bank of England’s interest rate.
Learn more in our variable rate mortgage guide.
Tracker mortgages track a percentage above the Bank of England’s interest rate.
Your monthly repayments can go up or down.
Discounted variable rate mortgages are linked to your lender's standard variable rate (SVR).
This is a discount rate usually for 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 buyers usually take out the same type of mortgages as everyone else.
Lenders often give first time buyers special deals like cashback and fee free mortgages.
Learn more in our first time buyer guide.
If you buy a home to let, you’ll need a buy to let mortgage.
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.
The difference with a buy to let mortgage is that often:
the fee the lender charges to get one is higher
interest rates are higher
you need a deposit of at least 25% of the property's value
Learn more in our buy to let mortgage guide.
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 to decide if they'll give you a mortgage.
Learn more in our bad credit mortgage guide.
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 less 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.
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, this is a payment holiday.
A lifetime mortgage is a loan you take out of your home.
The loan, and the interest, is paid off if you:
sell the home
move into residential care full time
Learn more in our lifetime mortgage guide.
An offset mortgage your mortgage links up 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 is often based on the full £150,000. So you’d overpay each month and pay off your mortgage quicker.
With an offset mortgage you will:
pay off your mortgage quicker
pay less interest in the long run
pay less tax because you do not earn any interest if the money is offset against your mortgage
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.
Learn more in our house deposit guide.
When the initial period of your deal ends, you'll move to your lender's standard variable rate (SVR).
This will usually make your monthly payments higher.
The difference between a market leading deal and average SVR is around £4,700 in interest a year. This research is from the Trussle Mortgage Saver Review 2018.
Start looking for a new mortgage deal 3 to 6 months before your lender moves your mortgage deal ends. This will give you time to switch before you move to the SVR.
Learn more in our remortgage guide.
Government Help to Buy scheme
Mortgage with arrears
If you fall behind paying your mortgage, talk to your lender.
Your lender might let you:
pay your mortgage for longer
pay only the interest
have a mortgage holiday
Pay your mortgage for longer
You could reduce your monthly payments so you can manage them by extending a 25 year mortgage to 30 years.
If you extend your mortgage, you’ll pay more interest in the long term.
Pay the interest only
You may be able to switch to only pay the interest for a short amount of time. Most mortgages will ask you to pay both the interest and loan.
This will also make your monthly payments lower. You’ll need to decide how to afford the payments when they go up again.
Your lender might offer you a payment holiday. This means they'll let you stop making payments for a certain period of time.
This is not possible with all mortgages.
When the holiday ends, your mortgage balance will be higher because you have not been paying it off. This means your payments will be higher too.
How many months in mortgage arrears before repossession
Lenders will often write to you 15 days after you miss a payment.
Often they give you at least three months to sort out your payments.
If you’re still behind on payments, 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 a possession order they'll have a legal right to own your home from the date on the order.
If you do not leave your home by that date, your lender can ask the court to evict you.
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.
Lenders prefer to sell homes fast so you could get a better price doing it yourself.
You’d also avoid having a repossession on your records. This 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.
If the court has already granted your lender a reposession order, you cannot sell your home.
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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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