What is a Mortgage?

Mortgages are loans taken out to allow you to buy a property. The amount you can borrow can vary, depending on your deposit, income, and credit score. Mortgages are repaid on monthly periods over a set term, plus interest. If you fail to keep up your monthly payments, your lender is entitled to take possession of your property. 

There are several types of mortgages, including first-time buyer mortgages and green mortgages. Your mortgage rate can be fixed or variable, and the repayment term can be up to 40 years. The longer your mortgage term, the lower your monthly payments. However, the total amount you pay will be greater. 

Your Deposit

It is important to remember your mortgage does not include your deposit and you need to have this money ready in cash for Exchange of Contracts/Conclusion of Missives. Remember if you are buying a second-hand home and you have offered over the Home Report/Survey value, you will also need to have this money ready in cash. 

Most mortgages look at a 10% deposit, but this can be higher or lower. A higher percentage deposit usually means you can access mortgage offers with lower interest rates. 

However, mortgages with a 5% deposit are becoming more popular, particularly for first-time buyers. If you are looking to put down a 5% deposit, be sure to check out our Deposit Unlock purchase scheme.

Recommended IFAs

Independent Financial Advisors (IFAs) can provide mortgage advice and help you plan and budget for buying a house. We have recommended IFAs, if you would like us to put you in touch with one, just ask.

Arrow up
CALA Homes