Thinking of buying a new home? Then there’s a good chance you’ll need a mortgage. Read our guide to applying for a mortgage here.
A mortgage is a loan from a bank or building society towards the total cost of a property.
To buy a home, most people put down a cash deposit (usually at least 5% of the property price) and the mortgage makes up the rest of the payment, which you pay back over a set number of years via monthly instalments.
The amount you can borrow generally depends on how much you can afford to pay on monthly mortgage payments and how much deposit you can put down on your new home.
The bank will usually require a deposit of anything between 5% and 40%.
Also known as mortgage brokers or sometimes financial advisors, work separately from any mortgage company, lender or bank to help assist in finding the right mortgage for you. They provide a service to offer independent, impartial mortgage advice, which covers most of the market and is often fee free.
You would make monthly payments plus an agreed interest rate on your mortgage. With a larger deposit, your mortgage and monthly repayments would be smaller.
The payments you make depend on several things such as the value of the mortgage and the length of the term, the interest rate you pay and the type of mortgage you have.
The amount of interest you pay on top of your loan will depend on the interest rate of the mortgage.
If you have a small deposit, you may pay a higher interest rate and vice versa if you have a large deposit. You pay interest on your loan on a monthly basis.
What are the main types of mortgage rate?
Frequently Asked Questions
Your mortgage advisor will start with an informal review of your financial situation to check if you’re likely to be able to get a mortgage. Then they will be able to tell you:
The mortgage lender will assess your credit rating to predict your likely financial behaviour. Your credit score will dictate which mortgage products you’ll be offered.
Here are some simple tips to help you improve your credit rating:
As soon as you’ve had an offer on a property accepted, it’s time to apply for a formal mortgage offer.
For the application, you and any joint borrower must provide details including name, address and income.
You’ll also be asked for documents such as:
Read our buyer guide
First time buyer guide
Thinking of buying your first home? Take a look at our buyer guide.
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Green Mortgages
Green mortgages encourage homeowners to either buy environmentally friendly homes or make energy-efficient home improvements to their existing properties.
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Independent Mortgage Advisors
Applying for a mortgage is likely to be the biggest financial decision you will ever make. Seeking advice is a sensible approach to help ensure that you find the best product.
