MORTGAGES
Mortgages explained
At Roxburgh Financial Services, we will guide you through the intricate process of finding the right mortgage. We take pride in delivering comprehensive, unbiased mortgage advice tailored to each client’s circumstances.
We provide tailor-made mortgage advice for a variety of clients. Our expertise extends across the spectrum, from assisting first-time homebuyers to existing homeowners, self-employed professionals, and buy-to-let landlords.
Your mortgage choice should reflect several critical factors, such as your credit score, the size of your down payment, your consistent income, and the overall value of the property you’re considering. Here, we explore the essentials of different mortgage types and the critical factors every business should consider.
If you’re ready to explore your mortgage options with a team that values your financial success as much as you do, contact us today. Together, we’ll pave the way to your property goals.
Repayment mortgages
Repayment mortgages are a popular choice for those looking to build equity in their homes incrementally. With this type of mortgage, each monthly payment reduces the loan’s principal amount and covers the interest. This dual advantage means that you’ll have full property ownership by the end of the mortgage term.
The advantage of a repayment mortgage lies in its simplicity and the financial security it offers, as your equity stake increases with each payment. This growing equity brings you closer to outright ownership and positions you favourably for lower interest rates and a broader selection of mortgage products in the future.
Interest-only mortgages
Interest-only mortgages present an alternative route, where monthly payments are solely dedicated to covering the interest on the loan. The principal debt remains untouched until the end of the mortgage term.
This option offers significantly lower monthly outgoings, appealing to those confident in their ability to settle the principal sum when the term concludes. However, due to their perceived higher risk, interest-only mortgages come with stricter affordability checks and are generally more suitable for individuals with substantial equity.
Fixed-rate mortgages
For many, the predictability of fixed-rate mortgages is immensely appealing. By locking in your interest rate for a set period—which can be one, two, three, five, 10, or even 15 years—you gain immunity against market fluctuations. This certainty allows for financial planning without the worry of potential increases in interest rates affecting your monthly repayments.
Tracker mortgages
Tracker mortgages adjust in tandem with an external benchmark, typically the Bank of England base rate. This direct correlation means your repayments reflect current market rates, affording potential savings when rates are low.
Despite their fluctuating nature, tracker mortgages have recently become more competitive than fixed-rate options, especially at low-interest rates. Our expertise extends to analysing these trends, enabling us to recommend timely switches that capitalise on market conditions without incurring penalties.
Standard variable rate mortgages
Upon reaching the end of a fixed or tracker mortgage period, many automatically transition to their lender’s Standard variable rate mortgage (SVR). This frequently adjusted default rate mirrors broader economic trends, often resulting in variable monthly repayments.
However, reliance on SVR mortgages is generally not advisable due to their tendency to command higher rates than market alternatives. Acknowledging this, our expert Roxburgh Financial Services mortgage specialists will explain your options to move to a more advantageous arrangement that could better serve your financial situation at the time.
Discounted rate mortgages
Discount mortgages may present an attractive initial offering. Rates are set below the lender’s SVR for fixed periods—typically two to five years or sometimes the entire mortgage term.
However, akin to standard variable rate mortgages, your monthly repayments might vary, introducing an element of unpredictability into your financial planning. Roxburgh Financial Services guides clients through the intricacies of discount mortgages, empowering them with the knowledge to make informed decisions.
Flexible rate mortgages
For those seeking versatility in their mortgage plan, flexible rate mortgages offer several benefits, including the options to overpay, underpay, and even reclaim overpayments. These mortgages cater to fluctuating financial situations, allowing for tailored payment plans, including payment holidays, under certain conditions.
While flexible, it’s crucial to understand that these adjustments will affect future payments. Our experts can help you discern whether a flexible rate mortgage aligns with your financial strategy.
Capped rate mortgages
Many people seek a balance between stability and flexibility, so they consider capped rate mortgages. These products cap your interest rate, ensuring monthly payments never exceed a predetermined threshold.
While they generally have slightly higher rates than the lowest market deals, the security of a cap provides peace of mind against unexpected rate rises. At Roxburgh Financial Services, we weigh the pros and cons with you, helping you decide if a capped-rate mortgage suits your risk profile and financial plans.
Offset mortgages
Offset mortgages link your savings account directly to your mortgage debt. This arrangement allows your savings to counterbalance the interest due on your mortgage, potentially reducing overall interest payments and monthly instalments.
This approach saves on interest and retains the earning potential of your savings. Understanding the benefits and mechanics of offset mortgages is part of our comprehensive advisory service to optimise your financial position.
Decision-making with expert advice
At Roxburgh Financial Services, we understand the importance of making well-informed financial decisions. Our dedicated team of advisers brings a wealth of expertise to ensure you’re equipped with comprehensive insights into each mortgage option’s nuances.
Ready to start your journey towards finding the right mortgage?
Navigating the complexities of obtaining a mortgage tailored to your unique situation requires careful consideration beyond just the lowest interest rate. Your specific needs and goals dictate the kind of mortgage you should pursue.
The expert team at Roxburgh Financial Services is here to guide you through this process, offering specialist advice to connect you with a financing solution that matches your long-term ambitions. Begin your journey towards finding the right mortgage today.