Mortgages for everyone

Yes, you can overpay your mortgage or pay it off early, but some deals have early repayment charges (ERCs). Many lenders allow you to overpay by up to 10% of the loan balance annually without penalty, which can save interest in the long term.

The main types of mortgages in the UK include repayment (you repay both the loan and interest each month), interest-only (you only pay the interest monthly and repay the loan at the end of the term), fixed-rate (interest remains constant for a set period), and tracker mortgages (interest ‘tracks’ the Bank of England's base rate).

A fixed-rate mortgage guarantees your interest rate and monthly payments won’t change for a specific period, often 2–5 years. A tracker mortgage, on the other hand, will follow the Bank of England base rate, meaning your payments may increase or decrease depending on rate changes.

Most UK lenders require a deposit of at least 5% of the property’s value. However, if you can put down a larger deposit (e.g., 10%–20%), you’re likely to get better mortgage rates and terms.

There isn’t a universal credit score requirement, but most lenders look for a ‘good’ credit score, typically over 600 on UK systems like Experian. A stronger credit score may help you access better interest rates and loan options.

An Agreement in Principle (sometimes called a Decision in Principle) is a document from a lender that states how much they may be willing to lend you based on your financial information. It’s often required when making an offer on a property and helps show you’re a serious buyer.

Your mortgage rate depends on factors such as the size of your deposit, your credit score, the economy (e.g., Bank of England base rate), and the type of mortgage you choose. A smaller deposit or poor credit history will usually result in higher interest rates.