A Mortgage – your biggest financial commitment
Buying a home is the single biggest and most important financial decision you will ever make. Yet for many people, choosing their mortgage is little more than an afterthought.
It’s understandable, of course, that in the middle of moving to a new place and making somewhere new your own, that you might not give choosing your mortgage the attention it deserves. But the truth is that after your income, mortgage repayments usually have the single biggest influence on your finances.
What can look like a marginal difference in a rate or term at the outset can really add up to a lot of money over the years of a typical mortgage. Which is why it always pays to properly consider all your options before making any decisions.
Mortgages come in all shapes and sizes.
Here are some of the more popular mortgages, but there are others such as pension and offset mortgages that can also be considered:
First Time Buyer Mortgage |
Most mortgage lenders offer first-time buyers attractively packaged mortgages, often with longer repayment terms and introductory fixed-rates. However, it still pays to look around as these may not always be the best option for first-time buyers. |
Fixed Rate Mortgage |
These can be a great aid to forward financial planning as you will know what your repayments will be for up to 5 years. Choosing the right time to fix can be tricky, however, and it may be a shock if you then move to a higher standard variable rate. |
Professional Mortgage |
Some lenders offer incentives such as discounted rates, longer repayment terms and a higher percentage of the purchase price to people in professions such as law, accountancy, dentistry and medicine. Always ask if this option is open to you. |
Tracker Mortgage |
A tracker mortgage follows the fortunes of the European Central Bank (ECB) interest rate and offers a fixed margin above that rate, guaranteed for the life of your mortgage. These products have been withdrawn by the major lenders in recent times. |
Loan-to-Value Mortgage |
These are usually offered alongside a tracker mortgage. Your mortgage interest rate is based upon the ratio of your loan to the value of your home – usually if your outstanding mortgage is less than 50% or 60% of the market value of your home. |
Investment Mortgage |
Often known as a buy-to-let mortgage. If you are looking to buy a second property to rent out and earn an income, or to use as a holiday home, an investment mortgage will usually allow you to borrow up to 70% of the purchase price. However, these usually attract a higher interest rate. |
Get your mortgage to work for you
A mortgage is also one of the most powerful and flexible financial tools at your disposal. It can enable you to raise finance for other purposes, or to consolidate a variety of debts at a more attractive rate.
No matter what you want a mortgage for it’s worth getting the best advice possible. The mortgage market is very competitive and there are some sophisticated products out there, which may or may not be suitable for your needs. As your circumstances and the market changes it’s a good idea to regularly review your existing arrangements to see if you could get a better deal.
We can secure the best deal for you
At CFS we have strong working relationships with a number of mortgage lenders and are well placed to negotiate the very best rates and terms on your behalf. If you are looking to remortgage, change the type of mortgage you have or switch providers we can review your options to secure the best deal for you.
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