7 Most Common Types of Mortgages for First-Time Buyers

If you're a first-time buyer, stepping into the world of mortgages can feel a little overwhelming. With so many different types to choose from, each with its own pros and cons, it's easy to get confused.

If you're a first-time buyer exploring your options, these 7 popular mortgage types, ranging from fixed-rate to guarantor mortgages, can suit a variety of goals.

1. Fixed-Rate Mortgages
2. Variable Rate Mortgages
3. Tracker Mortgages
4. Offset Mortgages
5. Interest-Only Mortgages
6. Guarantor Mortgages
7. Joint Mortgages

1. Fixed-Rate Mortgages

A fixed-rate mortgage means your interest rate and your monthly payments stay the same for a set period (usually 2, 3, or 5 years). This makes budgeting easier because there are no surprises.

Once your fixed term ends, you'll likely move onto your lender's Standard Variable Rate (SVR), which can be more expensive. That's why it's important to review your deal before the fixed period ends.

Best for: First-time buyers who want stability and predictable monthly payments.

2. Variable Rate Mortgages

With a variable-rate mortgage, your interest rate can go up or down depending on your lender or market changes. There are a couple of common types:

• Standard Variable Rate (SVR): Set by the lender and can change at any time.
• Discounted Variable Rate: Offers a temporary discount on the SVR, usually for 2 to 5 years.

Best for: Buyers who can handle changes in monthly payments and are comfortable with a bit of risk.

3. Tracker Mortgages

Tracker mortgages follow the Bank of England's base rate, plus a set percentage. So, if the base rate changes, your mortgage rate changes too.

For example, if the base rate is 5% and your tracker is +1%, you'll pay 6%.

Best for: Buyers who want a transparent link to interest rate changes and can manage some fluctuation in repayments.

4. Offset Mortgages

Got some savings? An offset mortgage links your savings account to your mortgage. Instead of earning interest on your savings, they reduce the amount of mortgage interest you pay.

For example, if your mortgage is £200,000 and you have £20,000 in savings, you'll only pay interest on £180,000.

Best for: First-time buyers with a good savings pot who want to reduce interest or pay off their mortgage faster.

5. Interest-Only Mortgages

With this type, you only pay the interest each month, not the actual loan. At the end of the mortgage term, you'll still owe the full amount, so you need a solid repayment plan.

Note: These are not usually recommended for first-time buyers as they're considered higher risk.

6. Guarantor Mortgages

If your income or deposit is low, a guarantor mortgage can help. A parent or family member agrees to cover your mortgage payments if you can't, which can help you borrow more or access better deals.

Important: It's a big commitment; your guarantor is legally responsible if you default.

Best for: Buyers with supportive family members who are willing to help get them on the property ladder.

7. Joint Mortgages

This is when you buy a property with someone else, often a partner, friend, or family member. Both incomes are considered, so you may be able to borrow more than you would on your own.

Best for: First-time buyers looking to team up and boost their borrowing power.

Need Help Choosing the Right Mortgage?

Choosing the right mortgage is a big decision, but it doesn't have to be a stressful one. Understanding your options as a first-time buyer is the first step towards finding the right deal for your circumstances. From fixed-rate certainty to the flexibility of variable or tracker mortgages, there's a solution for everyone.

If you're still unsure which type is best for you, speak with our trusted mortgage advisor in London. We're here to guide you through the process, explain everything clearly, and help you secure a mortgage that works for your future.

We'll take the time to understand your situation, explain your options in plain English, and find the mortgage that suits your needs, whether you're buying alone or with someone else.

Confused by the different mortgage types? Let Infinite Finance London explain the options. Get started today by calling 020 3813 7800, emailing info@infinite-finance.co.uk, or filling out our online enquiry form.

How We Help You Get Your First Mortgage

We make the home-buying journey easier with a straightforward 5-step approach:

1. Check how much you can borrow: Use our calculators or speak with an advisor to get a clear picture of your budget.
2. Get a Mortgage in Principle: This shows sellers you're a serious buyer, without affecting your credit score.
3. Find a property and make an offer: Once you've found the right home, we can even help you with negotiations.
4. We find you the best mortgage deal: Our experts search across 100+ lenders to get the most suitable deal for you.
5. Receive your mortgage offer: We'll guide you through to completion, working with your solicitor and estate agent on your behalf.

Free Mortgage Advice for First-Time Buyers in London

Whether you're buying your first home or simply looking for mortgage advice in Wembley, we're here to help. Book a free consultation with our mortgage broker in London today by calling 020 3813 7800 and take the first step toward your new home.

At Infinite Finance London, we offer free, no-obligation mortgage advice to help you understand your options and take the stress out of the home-buying journey. We're here to answer all your questions, handle the paperwork, and support you right up to the day you get your keys.

Contact First-Time Buyer Mortgage Brokers in London

If you are looking for a fast and friendly first-time mortgage broker in London, call Infinite Finance London today at 020 3813 7800 or fill in our online form.