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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Mortgages for different circumstances
For most people getting a mortgage is a key step on the journey to becoming a homeowner but with so much choice available, it can be difficult to identify the right mortgage for your specific needs. With so many types of mortgages available, we've created this handy guide about the features and benefits you can expect to find.
First Time Buyers
Getting a mortgage for the first time can seem very difficult, especially considering the different types of mortgages available and the size of deposit you may need to save up before you can afford a mortgage.
You may find that depending on the mortgage provider, you can secure a mortgage deal with a higher Loan to Value which means that the deposit you need to contribute to a mortgage is lower. However, you should be aware that the higher your Loan to Value is, the higher your monthly mortgage payments could be, meaning that you’ll pay more for your mortgage over the longer term.
Read our First Time Buyer page for more information on our First Time Buyer mortgages and to see our latest deals for First Time Buyers.
Remortgage
Remortgaging is a type of mortgage which involves switching mortgages from one lender to another, usually when an existing mortgage deal comes to an end. It can be a good way to get a cheaper mortgage as you may be able to switch to a mortgage with a lower interest rate and therefore reduce your monthly mortgage repayments - but you should also consider whether there are fees and charges, such as Early Repayment Charges(ERCs), involved for switching from your existing mortgage provider.
Find out more about getting a remortgage deal with our remortgaging page . If you’d like to know more about the process of applying for a remortgage with YBS, you can read our applying guide page.
Home Movers
We also provide mortgages for those changing from one property to another, should you wish to switch mortgages at the same time as moving home. This is different to the process of moving home and taking your existing mortgage with you (known as ‘porting’). Obtaining a new mortgage when you move can be a good way to secure a better deal although you should make sure you are aware of any exit fees such as ERCs or other charges you would need to pay to leave your existing mortgage provider.
Moving home can be a particularly stressful time so we make every effort to make the process of finding a mortgage as easy as possible. You might find that you need to increase the size of your mortgage if you are moving to a bigger property so it’s important to check on your affordability before beginning an application. Essentially a Home Mover mortgage application works the same way as those for a remortgage or for First Time Buyers but you’ll need to tell us about the property being sold as well as the new property.
You should refer to our Home Movers guide which details everything you need to know about getting a mortgage when you want to move to a new property.
Buy to Let
Another type of mortgage available from certain mortgage providers is the Buy to Let mortgage. This is a mortgage obtained for the purposes of letting a property out.
You may feel that purchasing a property to let is a good investment although it's worth considering that you would need to be prepared to tie up your money in the property for the medium to long term. There are also legal responsibilities that come with owning a rental property such as providing a rental agreement and making sure the property meets the necessary safety standards.
Yorkshire Building Society does not currently offer any Buy to Let mortgages but you can refer to the Money Advice Service website for guidance on how to purchase property for the purposes of letting.
Types of mortgage deals
Find out what types of mortgage exist in the market, what the main differences are and which is the best for your circumstances.
Fixed rate mortgages
With a fixed rate mortgage your interest rate and monthly mortgage repayments stay the same throughout the fixed rate period – with most mortgage providers, this is 2, 3 or 5 years.
If you prefer the stability of knowing how much you will pay for your mortgage each month then a fixed rate mortgage could be the best choice. However you should be aware that you would miss out on
making savings if interest rates fall.
Offset mortgages
Offset mortgages combine your mortgage with your savings to reduce the interest charged on your mortgage. Instead of earning interest on your savings, you pay the difference between the amount in your savings and the amount of your mortgage. This can help to reduce your current payments, your future payments or the term of the mortgage.
Tracker mortgages
A tracker mortgage, tracks (or follows) the Bank of England Base Rate over
a set period of time. When the Base Rate rises, your interest rate rises
– and when it drops, your interest rate also drops.
We apply ‘caps’ and ‘collars’ to tracker mortgages to ensure that any rate increases or decreases do not go over or under a certain interest rate.
Variable rate mortgages
Variable rate mortgages are mortgages where the interest rate is affected by a number of market conditions and can rise or fall depending on these. So, you may benefit from a drop in interest rates but could also end up paying more on your mortgage each month should interest rates rise.
Currently Yorkshire Building Society offer a range of Discounted Standard Variable Rate mortgages - these are mortgage deals where the interest rate is set at a specificed level below our Standard Variable Rate.
Repayment (capital & interest) vs. interest only?
Repayment (capital and interest) mortgages
- Your monthly mortgage payment will include repayments of both mortgage interest and capital.
- Your mortgage loan will be repaid at the end of the term, provided all payments have been met.
Interest only mortgages
- Your mortgage payments count as repayment of the interest being charged on the mortgage loan only, and not the capital.
- Therefore the capital must to be repaid via other methods at the end of the term.
We do not currently offer Interest Only mortgages but we do have a guide page for existing customers
who have one of these deals.
Mortgage deal incentives
Cashback
Depending on the kind of deal you select, you might find that there is a cashback incentive attached, most commonly with First Time Buyer mortgage deals. This is a lump sum paid to new borrowers upon completion of a mortgage and can be as high as £1,000 in some cases. It’s worth noting that you may end up paying a higher interest rate on mortgages with cashback although this will vary from provider to provider.
Free standard valuation
On some mortgage deals we’ll cover the cost of a standard mortgage valuation. You should be aware that this excludes second or subsequent valuations and doesn’t include the cost of obtaining a survey. If you decide to change your loan amount after we have got your valuation, you may need to cover the cost of a new valuation.
Free Remortgage Legal Service
This is dependent on the remortgage deal you select. This service, offered in conjunction with Optima Legal, covers the legal costs to complete a mortgage with us. Read our applying for a remortgage guide for more details on this incentive.
Finding the best mortgage deal
If you’re ready to apply for a mortgage or if you’re thinking about getting a mortgage and have just started researching available mortgage deals, it can seem like there are an overwhelming number of deals available.
Comparison sites can be used to help find a mortgage deal suitable for your particular needs. Whilst you may find some deals that seem attractive due to their low interest rate (and therefore potentially lower monthly mortgage payments), you should also check the fees connected to the mortgage and make sure that the Loan to Value (LTV) is suitable for you - this is the proportion of the amount being borrowed for your mortgage to the property’s value. Generally mortgage deals with lower interest rates will have a lower LTV so you would need to pay a bigger deposit upfront.
To make things easier when you are looking for a mortgage, we’ve put together some tips to help find the best deal:
1
Work out how much you would need to borrow for a mortgage
Most mortgage or comparison sites provide mortgage calculators to help you find out how much you’d be able to borrow.
We have a borrowing calculator which will show you in a couple of minutes how much we may be able to lend to you, based on your income and outgoings. We also provide a repayment calculator to show potential mortgage repayments for your specific mortgage.
2
Check what you can afford
Compare the monthly mortgage repayments for any new mortgage against what you are currently paying in rent or for your current mortgage. You should make sure a mortgage is affordable alongside your regular monthly outgoings.
3
Watch out for fees
You should be aware of the additional fees or costs you may need to pay upfront to secure a particular mortgage deal. You can sometimes add these to your mortgage repayments but this is not always possible.
4
Search for the best deal
Like with any large financial commitment, you should always shop around to make sure you find the best mortgage deal and one that suits your circumstances. There are a number of comparison sites online which will display the 'best buy' products and allow you to search for exactly the right kind of deal. We also provide a mortgage finder tool to help you quickly and easily search through our mortgage range.
What to do next
Call us
Speak to one of our friendly mortgage advisers about your options
0345 166 9510*