What is a mortgage? What is a mortgage? Video guide
What is a mortgage?
A mortgage is a loan that enables you to purchase a house.
Before deciding which type of mortgage would suit you best, watch our video for all the essential information you need to understand how a mortgage works.
The Which? Money Compare mortgage comparison tables let you search hundreds of deals from lenders large and small, enabling you to compare mortgages based on quality of service as well as cost and benefits.
Types of mortgage deals
With hundreds of deals to choose from, finding the right mortgage can be a minefield.
The video above explains the key differences between a repayment mortgage and an interest-only mortgage, which you can also read more about in: interest-only and repayment mortgages.
You might also want to take a look at the pros and cons of fixed-rate mortgages, tracker mortgages, discount mortgages and standard variable rate mortgages. For more information on all of these, click on the links in the left-hand menu.
The mortgage you choose will depend on your circumstances. Some important things to keep in mind when deciding which type is right for you include:
- how much you've have saved for a deposit
- the type of property you're buying - a house, flat, new-build etc
- the length of time you want to be paying off the mortgage
- how much you can afford to pay each month.
For more information on how to choose the best mortgage for you, visit our Which type of mortgage deal is right? page.
With so many different types of mortgage available, interest rates can vary considerably. Mortgages with a fixed rate over a long period of time tend to charge more interest, as you're paying for the security of knowing that the amount you pay won't change during that period.
It's not just the interest rate you need to look out for though. While choosing the the lowest rate might seem like the best option, low-rate mortgage deals often come with large arrangement fees, meaning you could end up spending a much larger chunk up front to secure your deal. Depending on your circumstances, a mortgage with a higher interest rate and smaller arrangement fees could work out cheaper.
Find out more: Which? Mortgage Advisers - if you'd like an impartial expert to look at every single mortgage on the market and recommend the best one for your personal circumstances, call 0808 252 7987.
- The Which? home-buying quiz - how much do you know about mortgage and home-buying?
- Compare mortgages for first-time buyers - find the best deal for you
- The process of buying a house - an interactive guide to what happens and in what order
Your home may be repossessed if you do not keep up repayments on your mortgage.
Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.