The Bank of England finally cut interest rates to 5% at its August meeting.
Previously it held them at 5.25% seven times in a row. The current high rates have driven up the cost of mortgages.
This page provides an overview of the UK market and includes information about the different types of mortgages, the most well-known lenders, and some general advice on saving money on your mortgage.
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Contents of this page
The UK has around 340 mortgage lenders and administrators including banks, building societies, credit unions, and specialists, jointly regulated by the Bank of England Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
We’ve included some of the most well-known here.
Getting a mortgage is a significant financial commitment, and it’s crucial to understand the different types of mortgages, and which one will suit you.
There are two types of mortgage repayments: capital repayment and interest-only.
With a repayment mortgage, you pay back part of the loan plus interest each month. Payments are calculated so you’ll have repaid the whole mortgage and the interest by the end of your agreed term.
Interest-only mortgages mean you just pay the interest during your mortgage term – your monthly payments don’t go toward paying off the amount you’ve borrowed. At the end of your term, you’ll still owe the full amount you borrowed, so you’ll need to pay it back in one lump sum.
Monthly payments are higher for a repayment mortgage – but they’re considered a better option because: