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ere in Paisley, we keep an eye on the best deals out there that help make all our lives a little easier. In this article, we turn the spotlight on mortgages. Given the huge range of products out there and the cost of houses, it’s no wonder that choosing the right mortgage can be a bewildering and stressful experience.  Here’s a quick guide to how to compare mortgages on Money Expert.

Firstly, it’s important to work out your house buying budget and stick to it. Once you’ve taken out a mortgage, you must keep up monthly payments to avoid repossession. Recognising your borrowing limits can save a lot of potential heartache.

Now let’s take a look at the different types of mortgages out there.

There are four main types which are categorized according to the purpose of the mortgage.

First-time buyer

If you’re buying your first home, a first-time buyer mortgage is ideal. The deposit is around of 5-10% and they charge a higher interest rate than other mortgage types but they do help you get on that all-important first rung of the property ladder.

Home mover

If you’re looking to move then a home mover mortgage is for you. This can be used to either pay off your existing mortgage and put the remaining equity towards your new home or to release cash if all your money is tied up in your home.

Remortgaging 

This refers to switching to a new provider or product to get a better deal at the end of the initial mortgage period. This can save considerable sums of money over the lifetime of your mortgage.

Buy-to-Let

A buy-to let mortgage is the go-to product if you want to be the next monopoly king. A 25% deposit is required but the rent from your tenant should cover the repayments and utility bills and maybe leave a profit. 

Interest only or repayment?

Mortgages can be either interest only or repayment where you pay interest and capital each month. Most buy-to-let mortgages are interest only so you need to have money set aside to pay off the mortgage at the end of the term. This contrasts with repayment mortgages which cost more on a monthly basis but you own the property at the end of the deal providing all payments have been made.

To fix or not?

Fixed rate mortgages are where the interest rate is set at the beginning of the mortgage whereas with variable mortgages, they follow the standard variable Rate (SVR) and the Bank of England base rate. Fixed rates provide the security of knowing what your monthly payments will be although the interest rate is usually higher than for variable rate products.

A third option is a tracker mortgage which fluctuates in line with the SVR but only up to a set point.

To summarise, don’t over-commit yourself, and use the money expert comparison site to find the best deal.