Choosing the right mortgage is just as important as finding the right property. With so many different types of mortgages available in the UK, it can feel overwhelming — especially for first-time buyers or those looking to remortgage.
In this guide, we’ll break down the most common mortgage options to help you understand what’s available and what might suit your personal and financial goals.
1. Fixed-Rate Mortgage
A fixed-rate mortgage offers a set interest rate for a specified period — typically 2, 3, 5, or 10 years. Your monthly repayments stay the same during this time, offering certainty and helping with budgeting.
Most suitable for:
- First-time buyers
- Anyone who prefers stability and predictable payments
Things to consider:
- You may pay more if interest rates fall
- Early repayment charges apply if you leave before the fixed term ends
2. Tracker Mortgage
A tracker mortgage follows the Bank of England base rate, plus a set percentage. If the base rate rises or falls, your mortgage payments will too.
Most suitable for:
- Buyers who can tolerate some risk and want to benefit from potential rate drops
Things to consider:
- Your payments could increase if the base rate rises
- Less certainty with monthly budgeting
3. Discounted Variable Rate Mortgage
This mortgage offers a discount on the lender’s standard variable rate (SVR) for a set period. It’s another form of variable-rate mortgage, so your monthly payments can fluctuate.
Most suitable for:
- Buyers looking for a lower initial payment
- Those who expect to move or remortgage soon
Things to consider:
- Your payments can increase at any time
- The lender can change their SVR regardless of the Bank of England rate
4. Offset Mortgage
An offset mortgage links your mortgage to your savings account. Instead of earning interest on your savings, the balance is used to reduce the amount of interest you pay on your mortgage.
Most suitable for:
- Buyers with significant savings
- Those who want flexibility and the ability to reduce interest without locking money away
Things to consider:
- You won’t earn interest on your savings
- Not all lenders offer this option
5. Repayment vs Interest-Only Mortgages
Repayment mortgage: You pay both the interest and some of the capital each month. At the end of the term, your mortgage is fully paid off.
Interest-only mortgage: You pay just the interest monthly, with the full loan amount still due at the end of the term. You’ll need a clear repayment strategy in place.
Repayment is best for:
- Most residential buyers — especially first-time buyers
Interest-only is most suitable for:
- Certain buy-to-let investors
- High-net-worth individuals with a defined exit strategy
So, Which Mortgage is Right for You?
There’s no one-size-fits-all solution. The right mortgage depends on your circumstances, including:
- Income and outgoings
- Deposit size
- Attitude to risk
- Plans for the future
Whether you’re a first-time buyer, home mover, or remortgaging
Speak to a Local Mortgage Expert
As a mortgage adviser based in Exeter and Devon, we help clients find the most suitable mortgage product for their needs. If you’re unsure which mortgage type is right for you, get in touch today for free, friendly advice.
Most Buy-To-Let Mortgages are not regulated by the Financial Conduct Authority
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
NxtGen Mortgages is a trading name of Just Mortgages Direct Limited which is an appointed representative of The Openwork Partnership, a trading style of Openwork Limited which is authorised and regulated by the Financial Conduct Authority.
Approved by The Openwork Partnership on 04/06/2025
