Frequently asked questions

A mortgage is a loan from a bank, building society or specialist lender that lets you buy a property. You put down a deposit and borrow the rest, then repay the loan plus interest in monthly instalments over an agreed term. The loan is secured against the property, which means the lender can take it back if you do not keep up the repayments.

A mortgage broker sits between you and the lenders. We look at your income, deposit, credit history and plans, search a wide range of lenders for a mortgage that suits you, and then manage the application through to completion. We also keep in touch with the lender, solicitor and estate agent so you are not chasing everyone yourself.

Mortgage advisers are regulated by the Financial Conduct Authority and must recommend a mortgage that is suitable for your needs and circumstances. Before you go ahead, we will explain the range of lenders we work with, how we are paid and any fee we charge, so there are no surprises.

With a repayment mortgage, each monthly payment covers the interest and part of the loan, so the balance falls over time and is cleared by the end of the term.

With an interest-only mortgage, you only pay the interest each month, so the full loan is still owed at the end of the term. You need a credible plan to repay it, such as savings, investments or the sale of another property, and lenders will check this carefully. Some people use a mix of the two, known as part and part.

A fixed rate keeps your interest rate, and so your monthly payment, the same for a set period, commonly two, three or five years. That makes budgeting easier, but you will not benefit if rates fall during the fixed period.

A variable rate can go up or down. Trackers follow a set rate such as the Bank of England base rate, discounted rates sit a set amount below the lender’s standard variable rate, and the standard variable rate itself is set by the lender. Variable rates can offer more flexibility, but your payments can change.

A tracker is linked to a specific rate, usually the Bank of England base rate, and moves up and down with it by a set margin. A Standard Variable Rate (SVR) is the lender’s own default rate. It tends to move when the base rate changes, but the lender decides by how much and when. Most mortgages move onto the SVR when the initial deal ends, and it is usually higher than the deals available, which is why it pays to review your mortgage before your deal finishes.

LTV stands for loan to value. It is the size of your mortgage as a percentage of the property’s value. If you buy a £200,000 property with a £30,000 deposit, you borrow £170,000, so your LTV is 85% and your equity is 15%. The lower your LTV, the wider the range of mortgage deals usually available to you.

Terms commonly run from 20 to 35 years, and some lenders go longer. A longer term lowers your monthly payment but means you pay more interest overall. Lenders also look at your age at the end of the term and your planned retirement age. We will help you find a balance between a comfortable monthly payment and the total cost.

An agreement in principle (also called a decision in principle or mortgage in principle) is a statement from a lender saying how much it would be willing to lend you, based on a first look at your details and a credit check. It shows estate agents and sellers that you are serious and helps you set your budget.

It is not a mortgage offer. The lender will still carry out full checks and a valuation when you apply. Agreements in principle usually last between 30 and 90 days depending on the lender. Many lenders use a soft credit search at this stage, which other lenders cannot see, but some use a hard search, so ask us which applies before you go ahead.

As well as your deposit, budget for:

• Lender fees, such as a product or arrangement fee and sometimes a booking fee
• A valuation fee, although some deals include a free valuation
• Legal or conveyancing fees
• A survey, if you choose one
• Stamp Duty, depending on the price and your circumstances
• Any broker fee, which we will always explain before you commit
• Removals and the cost of setting up your new home

Some deals with no product fee have a slightly higher rate, so it is worth comparing the total cost over the deal period rather than the rate alone.

It varies. Getting an agreement in principle can take minutes, and a full application with straightforward paperwork can reach a mortgage offer in a few weeks. The wider purchase, including searches, surveys and the chain, often takes several months. Having your documents ready and a solicitor instructed early are two of the best ways to keep things moving.

Most mortgage offers last somewhere between three and six months from the date the offer is issued. If you are in a long chain or buying a new build, keep an eye on the expiry date. If an offer runs out, you may need to reapply, and the lender will assess you under its criteria at that point.

An Early Repayment Charge (ERC) is a fee some lenders charge if you repay all or a large part of your mortgage during the initial deal period, for example by remortgaging elsewhere or selling. It is usually a percentage of the balance and often reduces each year. Many lenders let you overpay up to a set amount each year, often 10% of the balance, without a charge. If you are moving home, a portable mortgage may let you take your deal with you and avoid the charge.

The minimum is usually 5% of the purchase price, and a small number of lenders offer mortgages with no deposit at all. A larger deposit lowers your LTV, which usually gives you access to more deals and can reduce your monthly payments. Remember to keep money aside for fees, Stamp Duty and moving costs too.

It is possible but less common. A few lenders offer 100% mortgages, usually with strict affordability checks. Other options include family-assisted mortgages, where a relative uses their savings or property as security, and joint borrower sole proprietor mortgages, where a family member’s income is included but they are not on the deeds. We can talk you through which, if any, would suit you.

Yes. Gifted deposits from family are common and accepted by most lenders. The person giving the money will usually need to sign a gifted deposit letter confirming it is a gift, not a loan, and that they will have no share in the property. Your solicitor will also need to see where the money came from, as they are required by law to check the source of funds. Sorting this out early avoids delays later.

Yes, if you are a first-time buyer. You can open a Lifetime ISA if you are aged 18 to 39 and save up to £4,000 a year, and the government adds a 25% bonus, up to £1,000 a year. To use it for your first home:

• the property must cost £450,000 or less
• you must be buying with a mortgage
• at least 12 months must have passed since your first payment in
• the money is paid to your conveyancer or solicitor

Withdrawing for any other reason before age 60 usually means a 25% charge. Full rules are on GOV.UK.

Yes. You can buy with a partner, friend or family member, and combining incomes may mean you can borrow more. Everyone named on the mortgage is responsible for the whole debt, not just their share. You can choose how to own the property, either as joint tenants or tenants in common with set shares, and it is worth getting legal advice on which suits you.

Shared Ownership lets you buy a share of a home, usually from a housing association, and pay rent on the rest. You need a mortgage and deposit only for the share you buy, which can make getting on the ladder more achievable. You can usually buy further shares later, known as staircasing. Not every lender offers Shared Ownership mortgages, so specialist advice helps.

The lender’s valuation is for the lender’s benefit. It checks the property is worth what they are lending against, and it is not a detailed inspection. A survey is for you. RICS Home Surveys come in three levels: Level 1 for newer homes in good condition, Level 2 for most conventional homes, and Level 3 for older, larger or altered properties. A survey can flag problems before you commit and may help you renegotiate the price.

Conveyancing is the legal work involved in transferring ownership of a property. Your conveyancer or solicitor carries out searches, checks the title and contracts, handles the money and registers you as the new owner. You will need one whether you are buying, selling or remortgaging.

At exchange of contracts, the sale becomes legally binding and you usually pay your deposit. Pulling out after this point can be very costly. Completion is the day the money is transferred, ownership passes to you and you collect the keys. Completion can happen on the same day as exchange or weeks later, depending on what everyone in the chain agrees.

Yes, although some lenders cap how much they will lend on new builds, particularly flats, and some require a larger deposit. Any developer incentives, such as paid legal fees or contributions to costs, are taken into account by the lender. Build delays can also cause problems if your mortgage offer is close to expiring, so check how long your offer lasts.

Many lenders lend somewhere between 4 and 4.5 times your annual income (or combined income for joint applicants), and some will go higher in certain circumstances. The actual amount depends on your income, deposit, credit history, monthly commitments such as loans, car finance and childcare, and each lender’s own criteria. Try our affordability calculator for a rough idea, then speak to us for a figure based on your circumstances.

Lenders want to be sure you can afford the repayments now and if rates rise. They will usually review:

• Your regular income from employment, self-employment, pensions or investments
• Additional income such as overtime, bonuses and commission, which may be counted in part
• Other income, such as some benefits, rental income or maintenance payments
• Your outgoings and existing credit commitments
• Bank statements, to understand your spending

Each lender has its own approach, which is why the amount you can borrow can vary noticeably between lenders.

Requirements vary between lenders, but you will usually need:

• Photo ID and proof of address
• If employed, your latest three months’ payslips and possibly your P60
• If self-employed, your SA302s and tax year overviews from HMRC, or company accounts
• Recent bank statements, often three months
• Proof of your deposit and where it came from

Having these ready before you apply can save valuable time.

Many do, but often only part of it, or an average over the last year or two, to allow for the fact it can vary. Some lenders are more generous than others with this type of income, so it is an area where advice can make a real difference to how much you can borrow.

Not necessarily. Lenders do not see the score shown by credit reference agencies. They run their own assessment of your credit file. A thin file, for example if you have not used much credit, is different from a poor one, and you may still have plenty of options. It is worth checking your credit reports before applying so you can correct any mistakes.

Even with missed payments, defaults or a CCJ, you may still be able to get a mortgage. How recent the issues were, how large they were and whether they are settled all matter. Your options may be more limited, and rates, fees or deposit requirements may be higher. Speak to us before applying anywhere, as several declined applications can make things harder.

Payday loans, like other credit agreements, stay on your credit file for six years. Some lenders are cautious about recent payday loan use, even if repaid on time, but the impact usually lessens as time passes. Being open about your history helps us find a lender that will consider you.

Yes. Lenders usually want to see at least two years of accounts or tax returns, although some will consider one year. Sole traders typically provide SA302s and tax year overviews, and company directors may be assessed on salary and dividends or on their share of company profits, depending on the lender. Choosing the right lender for how your income is structured can make a big difference.

Often, yes. Some lenders will assess contractors on their day rate rather than on accounts, which can work well if you have a good track record and a current contract. Others prefer a longer history. Let us know how you are paid and how long you have been contracting, and we can point you towards lenders that understand it.

Yes. Lenders care about whether your total income supports the mortgage, not how many hours you work. If you have more than one job, some lenders will consider income from both.

Not necessarily. Many lenders will accept a new job, particularly if you are in the same line of work and have passed or are not subject to a probationary period. A complete career change, a long probation or a move to a temporary contract can limit your options. It is best to speak to us so you do not delay a move or turn down a job unnecessarily.

Yes, if you can show you can afford the mortgage, including after you retire if the term runs beyond that point. Lenders will look at your pension income and may limit the term based on your age. Some lenders specialise in later-life lending, so it is worth exploring the options.

Some lenders will count certain benefits as income, such as Child Benefit or disability-related benefits, alongside other earnings. Which benefits are accepted varies between lenders, so it may take some searching to find the right one.

Contact your lender as soon as possible. Lenders have to treat customers in financial difficulty fairly and may be able to offer options such as a temporary payment change or a term extension. Missed payments can affect your credit file, so acting early matters. Free, impartial help is also available from MoneyHelper.

Remortgaging means moving your mortgage to a new deal on the same property, either with a new lender or with your existing one. People usually remortgage when their current deal ends, to avoid moving onto the lender’s Standard Variable Rate, or to borrow more for home improvements or other plans.

Start around six months before your current deal ends. Many lenders let you secure a new deal that far ahead, and if rates move in your favour before it starts, a new deal can often be chosen instead. Leaving it late risks a period on the Standard Variable Rate.

A product transfer is when you move to a new deal with your existing lender, usually without borrowing more. It can be quicker and simpler than switching lender, as there is often no new valuation or legal work. It is not always the best value though, so it is worth comparing it with deals from other lenders before you decide.

Your mortgage normally moves onto your lender’s Standard Variable Rate, which is usually higher than the deals available, so your payments could rise. Reviewing your options several months before the end date gives you time to secure a new deal.

Many mortgages are portable, which means you can transfer your current deal to a new property, subject to the lender’s approval. If you need to borrow more, the extra is usually on a separate deal. Porting can help you avoid an Early Repayment Charge, but it is not always the best option, so we can compare it with the alternatives.

Yes, many lenders allow you to borrow more for home improvements, provided you meet their affordability criteria and the overall LTV is acceptable. Borrowing more over a long term will increase the total amount you repay, so it is worth weighing up the alternatives too.

It is possible, but think carefully. Moving short-term debts onto your mortgage can lower your monthly outgoings, but spreading them over a longer period may mean you pay much more interest in total, and the debt becomes secured against your home.

Think carefully before securing other debts against your home.

Some lenders allow a second residential mortgage, for example for a holiday home or a weekday base near work, if you can show you can afford both. It is usually harder to arrange than your first mortgage, and you should speak to us before committing.

Most lenders ask for a deposit of at least 25% of the property value, although some accept 20%. A larger deposit can open up more deals and make the rental calculation easier to pass.

Buy to let lending is mainly based on the expected rent rather than your salary. Lenders check that the monthly rent covers the mortgage interest by a set margin, called the interest coverage ratio, at a stressed interest rate. Typical ratios are 125% for basic rate taxpayers and limited companies and 145% for higher rate taxpayers, although every lender sets its own. Try our buy to let calculators to see how this works.

Many lenders ask for a minimum personal income, and some want you to already own a home. Others have no minimum income at all. If the rent on its own is not quite enough to pass the lender’s calculation, some lenders can take your personal income into account.

Many landlords now buy through a limited company because it is taxed differently. Individual landlords can only claim a basic rate tax credit for mortgage interest, whereas a company can usually treat it as a business cost. Limited company mortgages can have different rates and fees, and the right structure depends on your wider finances. We do not give tax advice, so speak to an accountant before deciding.

Let to buy is when you keep your current home and let it out, then buy a new home to live in. It usually involves a buy to let remortgage on your existing property and a residential mortgage on the new one. It can be a good option if you want to move but keep your current property, but you will need to pass two sets of lending checks.

You need your lender’s permission first, often called consent to let. Lenders may agree for a set period, sometimes with a higher rate or a fee. Letting without permission could breach your mortgage terms. If you plan to let long term, switching to a buy to let mortgage is usually the better route.

Yes, some lenders offer family buy to let mortgages for this. Letting to a close family member is usually treated as a regulated mortgage, which brings extra protections, and the rent normally still needs to cover the mortgage under the lender’s calculation.

Your lender will usually insist on buildings insurance being in place from exchange of contracts, as the property is its security. If you buy a leasehold flat, the freeholder often arranges this. Other cover, such as life insurance, is not usually a lender requirement, but it is well worth considering so your mortgage can still be paid if the unexpected happens.

• Life insurance pays out if you die during the policy, often used to clear the mortgage
• Critical illness cover pays a lump sum if you are diagnosed with a serious illness listed in the policy
• Income protection pays a monthly income if you cannot work due to illness or injury
• Home insurance covers the building and your belongings

The right mix depends on your circumstances, any cover through work, and your budget.

Death in service and sick pay schemes are valuable, but they usually stop if you leave your job and may not cover your full mortgage. It is worth checking exactly what you have and whether there are gaps.