Defining what type of mortgage is right for you is a very important step in the process of buying a home.
Mortgages can be a bit complex at first, but they generally fall into five categories:
- Fixed rate
- Standard variable rate
- Buy to let
Depending on what you pick, your monthly payment is either guaranteed, meaning you may not take advantage or lower interest rates, but will be protected if rates rise, or can fluctuate over time.
A slight variation in mortgage rates can mean a big difference in the total amount you will repay over the years. You can use a mortgage calculator to figure out your monthly repayment, as well as the impact of a lower or higher mortgage rate on your budget.
Make sure you can afford rate fluctuations if you opt for a variable rate mortgage!
Check out the infographic below for more information about mortgage types.