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Beginners Guide to Mortgage

There are so many things that are too complicated to get in one go and can be really confusing. A mortgage is one of those things, especially for beginners. But do not let it bring you down, if you could just understand the basics of mortgage then it will be much easier for you to get an understanding. This article will act as the perfect guide for beginners for understanding the basics of mortgage.

In a mortgage there is some amount that you can borrow while the rest needs to pay back, the amount is determined by a value known as LTV, LTV stands for loan to value and is expressed as a percentage. It describes the amount that you can borrow and is dependent on the value of the property. For instance, if the LTV value is 60% then you can borrow money that is worth 60% of property the property value, while you have to deposit the rest of the 40%. The payment can be made at different rates, to be more precise there are two ways in which the payment can be made, either at a fixed rate or a variable rate.

For first time buyers, it is always recommended to go for a fixed-rate mortgage rather than a variable rate mortgage. A fixed-rate mortgage gives you the advantage of pre-planning, in case you have a tight budget you can rest assured as the amount you have to pay is fixed. Visit for more details.

In the variable mortgage rate, there are different deals, one of the most popular ones is a tracking variable rate, it works on the base rate of the Bank of England. The mortgage rate either increases or decreases based on the increase and decrease in the base rate.