Types of Mortgages

Choosing which mortgage suits you is an important decision. Let us guide you through what’s available and the different types of mortgages.
 

Post Office Money® Mortgages are provided by Bank of Ireland UK

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE


Types of mortgages

A mortgage is a loan secured against real estate (land or property) for the purpose of the borrower owning that real estate upon the repayment of that mortgage.

The mortgage agreement sets out the terms of agreement between the borrower and the lender for the interest charges and the repayment of that loan.

You can repay your mortgage in the following ways:

Repayment mortgages

Each month you pay off a portion of the amount borrowed (the capital) as well as some of the interest on the loan. As you are paying the loan back over your mortgage term, as long as you keep up your repayments, you should be mortgage free at the end of it.

Interest Only mortgages

Your monthly payments only cover the interest part of your loan. At the end of the mortgage term, you’ll still need to repay the amount you originally borrowed so you will need to consider your repayment strategy and confirm with your lender that this is acceptable to them. You will also need to check with your lender whether or not they offer Interest Only mortgages as many lenders have recently restricted their Interest Only criteria.

Part and Part mortgages

Part of your mortgage will be on a repayment basis and part will be on an Interest Only basis. As with Interest Only, you will need to check with your lender if this repayment method is acceptable and the full terms and conditions.

The most common types of mortgages are:

Fixed rate mortgage:

You’ll pay a fixed rate of interest for a set period. This means that during your set period you’ll know each month what your monthly repayments will be so you can budget accordingly however because your interest rate is fixed your repayments will not change if interest rates reduce.

Tracker mortgage:

Your interest rate will follow the Bank of England Base Rate, or another base rate. As those rates go up and down, your mortgage rate and your repayment amounts will also go up and down.

Variable Rate mortgage:

Your payments go up or down in line with the lender’s standard interest rate instead of Bank of England Base Rate. The rate can go up or down at any time, by any amount.

More helpful information

Money matters

Working out your finances is a great place to start when figuring out how much you may be able to afford.

Learn more

 

Getting started

Some of the steps involved in the house buying process and some handy tips.

Learn more

 

Case studies

Our customers talk about how Post Office Money helped them get their dream homes.

Learn more

 

It is important that you have reviewed our product range in full before progressing with an online application.

Found the mortgage that suits you?

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Subject to status and lending criteria. Written illustrations available upon request. Borrowers must be aged 18 or over.

Post Office Limited is an appointed representative of Bank of Ireland (UK) plc which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, FRN 512956. You can check this on the Financial Services Register by visiting the website www.fca.org.uk/register or by contacting the Financial Conduct Authority (FCA) on 0800 111 6768. Bank of Ireland UK is a trading name of Bank of Ireland (UK) plc which is registered in England & Wales (No. 07022885). Registered Office: Bow Bells House, 1 Bread Street, London, EC4M 9BE. Post Office Limited is registered in England and Wales (No. 2154540). Registered Office: Finsbury Dials, 20 Finsbury Street, London, EC2Y 9AQ. Post Office Money and the Post Office Money logo are registered trademarks of Post Office Limited.