Mortgages explained

Mortgages explained

Mortgages can throw even the most seasoned buyers

What is a mortgage?

The majority of buyers require a loan to purchase a property. This loan is known as a mortgage.

Mortgages can be obtained from banks, building societies and mortgage lenders. They will assess your circumstances and lend you an amount that you can realistically afford to repay. They will charge interest on the loan and you will have an agreed time span (mortgage term) to repay the amount borrowed. It is important to understand that the interest rate can and will change over the duration of the loan.



Usually, lenders want to see that you can provide a deposit. However, that deposit may be as little as 5% of the property’s market value. If you can raise a 5% deposit, you will be looking at a mortgage with a 95% loan to value (LTV). Loan to value is the loan amount expressed as a percentage of the property value. For example, with 95% LTV on a £100,000 house, you would need a 5% deposit, i.e. £5,000, and your loan amount would be £95,000.

There are several key things to consider when choosing your mortgage:

  • How much can you afford to borrow and repay on a monthly basis?
  • How long should your mortgage term be?
  • Which repayment option is best for you?
  • Which type of mortgage is most suitable for your circumstances?

How much to borrow

The amount you are able to borrow is dependent on a number of factors, so you will need to consider the cost of moving, your monthly income and expenditure and your credit history.

Mortgage term

Your Mortgage and Protection Consultant can help you to find the right number of years (term) over which to repay your mortgage. If you spread your mortgage over a longer-term, your monthly repayments will be lower. However, please note that the longer your mortgage term, the more interest you will have to pay the lender.

Repayment options

There are two main mortgage repayment options available to you: repayment and interest only. The availability of both will depend upon your circumstances. Please note that part repayment part interest-only mortgages may also be available; your Mortgage and Protection Consultant can discuss this with you.

Types of mortgage

You have several options, each of which has advantages and disadvantages.


  • The same monthly payments for the initial period (usually 2, 3 or 5 years).
  • After this period, the rate usually reverts to a variable rate.
  • Easy to plan as exact costs known.
  • Payments cannot increase during the initial fixed period.
  • During the fixed period, payments cannot decrease and early repayment charges may apply.


  • The rate will be driven largely by the economy and the market.
  • The lender decides their current rate, which you pay – this does change.
  • You may benefit from rate reductions and pay less each month.
  • No early repayment charges during the term.
  • Rates may increase and therefore you will pay more each month.
  • Hard to budget

Please see our downloadable First Time Buyer Guide to Find out more

We compare 1000s of mortgages

We compare 1000s of mortgages

Our sister company, Countrywide Mortgage Services will compare 1000s of mortgages meaning that you don't have to! When buying your first home, it’s important that you choose a mortgage that you are comfortable with. With so many lenders and mortgage products available, it’s easy to become confused. That’s why we’re here to help.

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A fee will be payable for arranging your mortgage. Your Consultant will confirm the amount before you choose to proceed.

Countrywide Mortgage Services and Countrywide Insurance Services are trading names of Countrywide Principal Services Ltd which is authorised and regulated by the Financial Conduct Authority (Firm Registration Number 301684). Registered Office: Countrywide House, 6 Caldecotte Lake Business Park, Caldecotte Lake Drive, Milton Keynes, MK7 8JT. Registered in England no. 01707341. 777FTB WEB 02/20

Please note: 0800 118 2825 is a freephone number; some mobile providers may charge.

Get in touch

Our expert team of Mortgage & Protection Consultants are available to help you find the best mortgage for you - get in touch to book an appointment.

Opening hours

Monday – Thursday 09:00 – 19:00
Friday 09:00 – 17:30