Mortgages – A Complex Market

It’s no wonder that many people are confused by the mortgage market.

Are you happy to choose your mortgage without taking any advice? Not many people are, simply because the mortgage market can be so difficult to understand. The complexity comes from the sheer number of mortgages available to consumers, along with a number of repayment types. It can be difficult to work out which is best for you, which is why it is usually best to consult a professional adviser.

Understanding the mortgage market

Whether you are a first time buyer, you’re moving house, or you’re thinking of getting a remortgage, you need to spend time looking at the options available to you. You don’t have to be a financial whiz to choose a mortgage, but you do need to understand what each type of mortgage can give you. There are three main types of mortgage available on the market:

• Repayment – a repayment mortgage means that your monthly payment covers both the capital amount you borrowed and the interest on that amount. It will help to reduce your mortgage quickly.

• Interest only – your monthly payments only cover the interest on the amount you’ve borrowed, not the original capital. Your monthly payments may be lower, but you will have to pay the capital back when the term of the mortgage ends. This means that you will need to put other saving products into place to ensure you have the money when you need it.

• Offset – an offset mortgage allows you to use your current account and savings accounts to offset the money you’ve borrowed in your mortgage. This means, for example, that if you have a mortgage of £100,000, and your current account and savings total £20,000, you will only be paying interest on £80,000. Careful financial planning can save you money on your mortgage, but remember that you won’t get any interest on your savings.

In addition to these three main types, you can also choose from a range of other mortgages, and you may get to the point where you’re too confused to know which mortgage is going to work for you. That’s when it becomes important to talk to a financial adviser who can look at your personal requirements and find mortgage products that match those needs, turning a complex problem into a simple solution.

If you are looking for a mortgage, let the experts save you time and money by finding the right product for you. Homebank has only the best mortgage consultants ready to advise you on all your mortgage and insurance needs. For useful mortgage advice, call us to arrange a no obligation appointment to suit you. Homebank is the ‘people’s mortgage broker’ with over 3500 mortgage products to choose from, including products that are not readily available on the High Street. Homebank’s experienced consultants could find the ideal product for you – call us now on free phone 0800 052 3604 or enquire online.