Types of Mortgage

The information below gives a brief summary of the types of buy to let mortgages available:

Variable rate - This is the lender's normal variable interest rate.

Tracker - This type of mortgage generally tracks the Bank of England base rate.

Fixed Rate - This type of buy to let mortgage deal allows you to fix the interest rate of your loan so that for a set period you have the reassurance of knowing that your mortgage payments will not alter. This type of deal can help you with budgeting.

Capped Rate - This type of buy to let mortgage deal fixes an upper ceiling to the interest rates so that in the event of rising interest rates you will not pay any more than the limit set by the cap. If rates fall below the cap then your mortgage payments will reduce.

Discounted Rate - This type of buy to let mortgage allows a discount to the standard variable interest rate for a set period.

Cash Back - As an incentive to attract new clients some companies may offer a lump sum Cash Back. These are obviously useful if cash is needed at the outset, however the opening interest rates may not be as attractive.

Flexible Mortgages - This type of buy to let mortgage enables the borrower to actively manage their mortgage by altering the monthly payments or by paying off lump sums for example. Other options may include the facility to take payment holidays and to borrow further amounts.