Mortgage rates

The most common types of mortgages are: fixed rate, variable rate and tracker.

Depending on the deal you choose, your mortgage payments may stay the same throughout the term, or they may vary when the Bank of England's base rate or market conditions change.

Fixed-rate mortgage

As the name says, the interest on a fixed mortgage is fixed. Whatever happens to the Bank of England's base rate, the mortgage rate you're paying won't change, which means your payments won't either.

Good for: people who want the security of knowing exactly what their mortgage will cost every month, whatever happens to the base rate.

More About: Fixed rate mortgages

Tracker mortgage

Tracker mortgages 'track' the base rate (in most cases, the interest rate they charge will remain a fixed amount above it). When the base rate goes up or down, so will your mortgage rate - and your monthly mortgage payments. Some tracker mortgages won't go below a pre-defined minimum mortgage rate known as a 'collar' or 'floor'.

Good for: people who believe the base rate is about to go down - and who know they could afford the extra expense if it went up.

More about: Tracker rate mortgages

Standard Variable Rate mortgage

Like tracker mortgages, variable rate mortgages follow the Bank of England's base rate, but not so directly - whenever the base rate changes, lenders are free to choose whether or not to follow suit. (They will, however, want to keep their deals competitive.)

Good for: people who don't want to commit themselves to a mortgage that lasts for a fixed time period - with most fixed-rate mortgages, the borrower will have to pay an Early Repayment Charge (ERC) if they switch to a new mortgage before a certain time.

More about: Variable rate mortgages

Return to top

THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. DEBT CONSOLIDATION MAY INCREASE THE AMOUNT TO BE REPAID IN THE LONG TERM. Subject to status. An arrangement fee of 495 is payable on completion. For debt consolidation mortgages the fee is 1.5% of total advance (minimum 1295, maximum 1,695). No fee for returning customers. The actual rate available will depend upon your circumstances. Ask for a personalised illustration. Calls may be recorded.

Company Registration No. 4291279. Consumer Credit Licence No. 512740. Think Mortgages is a trading name of Think Loans & Mortgages Limited. Carlton House, Vere Street, Salford Quays, M50 2GQ. Registered in England and Wales. Authorised and regulated by the Financial Services Authority in respect of regulated mortgage and general insurance contracts. Calls to 0800 numbers from BT landlines are usually free. Calls to other networks may vary and you should check with your network provider for full details of your service.

All About Money Limited © 2013. All rights reserved. 42 Boston Rd, Sleaford, Lincolnshire NG34 7ER.