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Types of mortgage

Fixed, tracker, offset and the rest, explained

The type of deal you choose matters almost as much as the rate. Here is what each one actually does, in plain English.

The main types

How each one behaves

The right choice depends on how much certainty you need, how long you expect to stay, and whether you have savings you want to keep access to.

TypeWhat happens to your paymentTends to suit
Fixed rateLocked for a set period, usually two, three or five yearsAnyone who needs to budget with certainty
TrackerFollows the Bank of England base rate plus a set marginPeople who can absorb a rise and think rates will fall
DiscountA discount off the lender's own standard variable rateShort-term flexibility, often with lower exit costs
Standard variableSet by the lender and can change at any timeAlmost nobody by choice, it is where deals expire to
OffsetSavings sit against the balance and cut the interest chargedPeople with meaningful savings who want to keep access
CashbackA lump sum paid on completion, usually with a higher rateBuyers who need cash at completion more than the lowest rate

Worth understanding

The details that catch people out

Early repayment charges. Most fixed and discounted deals charge you to leave early, often a percentage of the balance that reduces each year. If there is any chance you will move or repay early, this matters more than a small difference in rate.

Product fees. A lower rate with a £1,499 fee is not always cheaper than a higher rate with no fee. On a smaller loan it usually is not. We compare the total cost over the deal period rather than the headline rate.

Repayment or interest only. On repayment you clear the balance by the end of the term. On interest only your payments are lower but the full balance is still owed at the end, and you need a credible plan to repay it.

Overpayment allowances. Most deals let you overpay up to 10% of the balance each year without penalty. Some are more generous. If you expect bonuses, this is worth checking.

Important

Your home may be repossessed if you do not keep up repayments on your mortgage.

Not sure which suits you?

That is what the first conversation is for. We will explain the trade-offs against your actual circumstances.