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Understanding mortgage jargon: A guide for homebuyers in the UK

Buying a home can be an exciting but also overwhelming experience, especially if it's your first time. There are many terms and concepts to understand, and it can be helpful to have a guide to refer to as you navigate the process. Here are some common terms you might come across as you research mortgages and consider purchasing a home in the UK:
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Mortgage: A mortgage is a loan that you take out to buy a property. The property itself serves as collateral for the loan. You’ll make monthly payments to the lender, which will typically include both interest and the amount borrowed. 

 

Interest rate: The interest rate on a mortgage is the percentage of the loan amount that you’ll pay in interest. This is in addition to the capital, or the amount of the loan itself. The interest rate can have a big impact on your monthly payments and the overall cost of the loan. 

 

Fixed-rate mortgage: With a fixed-rate mortgage, the interest rate remains the same throughout the fixed-rate period, typically 2 or 5 years. This can be a good choice if you want the stability of knowing what your monthly payments will be and if you think interest rates might rise in the future. 

 

Variable-rate mortgage: With a variable-rate mortgage, the interest rate can change over time. The rate is typically tied to a benchmark interest rate, such as the Bank of England’s base rate. A variable-rate mortgage can be a good choice if you think interest rates might go down in the future, but it also means that your monthly payments could fluctuate. 

 

Deposit: A deposit is a sum of money that you’ll need to put down when you buy a home. The size of the deposit will depend on the lender and the type of mortgage you’re getting, but it’s typically a percentage of the purchase price. A larger deposit can help you get a lower interest rate and may make it easier to get approved for a mortgage. 

 

Equity: Equity is the portion of the property that you own outright, as opposed to the portion that you still owe on your mortgage. As you make mortgage payments and the balance of your loan decreases, your equity in the property increases. 

 

Repayment mortgage: With a repayment mortgage, you’ll make monthly payments that include both interest and capital. This means that over time, you’ll pay off the entire loan and build up equity in the property. 

 

Interest-only mortgage: With an interest-only mortgage, you’ll only make payments on the interest portion of the loan. You’ll need to have a separate plan in place to pay off the principal, such as through investments or the sale of the property. Interest-only mortgages can be riskier and are less common than repayment mortgages.

 

At The Mortgage Branch, we are here to help you secure the most suitable mortgage for you, whatever your situation.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT 

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When you put down roots, so do we.

Working with our long-standing charity partner, Gloucestershire Wildlife Trust, we pledge to plant a tree in your name when your mortgage completes.

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David arranged both our private & rental property mortgages along with other financial matters & made the whole process as straightforward & easy as possible for us.

He was utterly professional & took us step by step through each process taking a huge amount of the stress away from us.

We couldn’t recommend The Mortgage Branch highly enough we are so glad we found you!

Thank you so much!

Alex Carpenter

Miles and the team are incredibly professional and I absolutely love the fact that they plant a tree for every mortgage!

Thank you so much!

Lauren Gilberthorpe

A very professional and efficient service.

I would recommend The Mortgage Branch to anyone looking to arrange a mortgage, however difficult the circumstances might be.

Thank you so much.

Samantha Scott-White

Best ever mortgage service! Three mortgages were done without hassle! Miles always goes that extra mile to deliver the best possible advice and service!

Highly recommended, very happy customers!

Alex Kulakevich

I seriously can’t recommend these guys enough, my boyfriend and I are first time buyers and we were let down so many times by our first mortgage advisor, it got to the point where we were at the verge of giving up on a mortgage and just rent until our friends told us to go to David! I honestly wish we went to The Mortgage Branch first, they managed to get us a mortgage within a couple of weeks, David and Lawrie have continuously kept us up to date with what’s happening, they are unbelievably friendly, very helpful and understanding! I couldn’t be happier with their services!

4 months ago I was stressed out and deflated, now because of The Mortgage Branch they’ve made us excited again!

Thank you, thank you, thank you!

Jess Lee

My partner and I were looking to buy a new house and we were looking for the right deal that we could get during these uncertain times, were so glad that we contacted The Mortgage branch, Cheltenham who helped us get a great deal!

We dealt with both David and James who both couldn’t do enough for us!!

A* for customer service and done with a smile!

Curtis Russell

Excellent service throughout the whole re-mortgage process. I could not have asked for more.

Great to see that the service exceeds expectations!

David Jones

Friendly and very professional. This is just the best place for anyone who needs a mortgage.

A big thank you!

Nuno Pinto

Miles and his team at the mortgage branch are excellent.

They dealt with a re-mortgage for us super efficiently with no drama whatsoever.

A massive thumbs up from us, highly recommend

Adam Lagos

Excellent and very efficient service from Jake, no query too small.

Always available and always more than happy to help.

Highly recommended.

Gary Parrish

David was fundamental in my house purchase.

He went above and beyond what was expected of him. My case was particularly complex however David constantly sought out solutions and contacted other parties when necessary.

Aside from making the process really easy for me, he also found me great products. He is reliable, consistent and we found him very trustworthy.

I highly recommend David.

Az Yi

David did a fantastic job with my Mortgage application.

Being my first mortgage, he was patient and understanding with all my questions, and he even liaised with my accountants directly.

Would recommend!

Emily Chung

Miles and the team at The Mortgage Branch were fantastic, and couldn’t have been more helpful through the process.

Thanks!

Jamie Walters

The Mortgage Branch could not have been more professional, helpful and generally pleasant.

Great knowledge and felt very confident and assured throughout.

I am now a homeowner – so thank you very much indeed!

Daniel Davies

An absolutely superb and superior personal service taking the stress and pressure out of the house buying process.

Chris Barry

We’ve just dealt with Jake Aubertin at The Mortgage Branch and, not only was he an absolute pleasure to deal with, he was able to save us over £10k on our total mortgage repayment! No-fuss, no mess, just honest, helpful advice.

I cannot recommend enough.

Jonny Carr

Having recently re-mortgaged residential and BTL properties through the Mortgage Branch it’s refreshing to find a team who deliver what they promise.

The client really does come first and Miles has worked tirelessly to find the right deals for me which is why I have happily recommended him to a couple of business partners who have also received the same high level of service.

It doesn’t matter how simple or complex the requirement is, Miles and David have the expertise, commitment and customer focus to find the very right deal.

This is such a painless process when you have a professional onboard and I would have no hesitation in recommending them again.

Dave Surgenor