Mortgage FAQs

A mortgage is a home loan. Since property can be expensive, and most of us don’t have a sweet pile of cash lying around, we need to borrow money to buy a house. A mortgage is the money that you borrow from a lender so that you can purchase a property of your own. Typically, you pay back the loan (the capital amount) each month, along with interest, so you’re one step closer to owning the property outright. 

A mortgage in principle, also known as a decision in principle, is an estimate from a lender of what you can borrow on a mortgage. Though you may not meet their criteria at the point of taking out a mortgage, it helps you understand what you could borrow before applying for a mortgage. 

A first-time buyer mortgage is a mortgage product for someone who has never owned property in the UK or abroad. Although there isn’t a specific product that qualifies as a first-time buyer mortgage, lenders often tailor mortgage deals to suit people buying their first home. 

Put simply – you need to have never owned property before. This means within the UK and outside of it. You’ll also need to have never owned or partially owned any inherited property, even if you never lived in it. If you’re buying a house with someone else who has owned a house previously, you’ll no longer count as a first-time buyer. 

If you’re not sure whether you’d qualify, chat to one of our friendly advisors who can give you more information on the mortgage deals available to you.

It’s not necessarily easier to secure a first-time buyer mortgage than it is to remortgage, as the processes are different. There are, however, ways to make securing your first mortgage easier, for example, by saving a larger deposit and decreasing your loan to value.  

If you’re finding the mortgage process difficult as a first-time buyer, talk to one of the Purplebricks Mortgage advisors who can take you through the process. 

In most cases, your mortgage lender will ask for a deposit of at least 5% of the total value of the property. You’ll unlock better first-time mortgage deals in increments of 5%, with the more attractive interest rates starting to come out at around 20%.   

Mortgage rates are changing all the time, with new rates added and old rates pulled from the market every day. The rates available to you as a first-time buyer will vary depending on your deposit and loan to value, as well as external factors like the state of the economy and the Bank of England base rate. 

The rates available to first-time buyers are generally the same as those available on the rest of the market. One of the best ways to lower your mortgage cost is to save a larger deposit which will lower your loan to value. There are also some buying schemes and discounts available to people making their first home purchase 

A mortgage advisor can help take you through your options to secure a competitive first-time mortgage deal.  

There’s no one-size-fits-all ‘best’ option for every first-time buyer. The options available to you will depend on interest rates, the size of your deposit, and how much you intend to borrow. 

A mortgage advisor can help you understand the process of securing a first-time buyer mortgage and decide which option will work for you. 

First-time buyers can take out a buy-to-let mortgage, however, you may find it harder than taking out a residential mortgage. This is because lenders have no track record of your ability to make regular mortgage payments. They may offer higher interest rates or ask for a larger deposit than if you were aiming to take the residential route. 

Wondering whether now is the right time to consider hunting for a new remortgage deal? There are a few reasons to think about switching up your mortgage:  

• Your current mortgage term has ended. When your initial deal with your lender ends, you’re often moved onto their standard variable rate. It’s a good idea to shop around at this point, as you might be able to secure a better remortgage deal with them or elsewhere.   

• Your circumstances have changed. A new job and a significant income change, starting a family, or getting a divorce can all mean that your mortgage no longer suits your needs. It may be time to search the market for the best mortgage deal to suit your new situation.  

• You want a lower remortgage rate or are after different terms. Coming to the end of a fixed rate mortgage deal may well mean you can unlock a better rate than the one you’re on – especially if you’ve built a lot of equity. It can also be a good idea to consider remortgage options if rates are now a lot lower than what you’re currently paying. Or, if you’d like to overpay and reduce your mortgage term, but your current lender won’t let you, you can look at remortgaging to find one who can.   

• You’d like to change your mortgage type. If you’d like to move from one type of mortgage to another, (for example, if you’ve been on an interest only deal, but now need to make the switch to a repayment mortgage), a good option is to chat to an advisor and find a new deal.  

• You want to extend your borrowing. Homeowners sometimes remortgage to borrow more money – for example, for home improvements. This option releases equity from your home, so it’s important to think through whether this is the right option for you and your home in the long run.   

• Your home’s worth a lot more than it was when you bought it. Or maybe you’ve gained a lot of equity whilst paying off your home. This could mean your loan to value has changed, and you could unlock lower interest rates on remortgage deals.  

• You need to consolidate your debt. If you have debts in a few places, borrowing more on your mortgage and paying these off is an option – especially when the other debts have very high interest rates. Make sure to consider fully whether this is the right choice for you, as failure to keep up with the payments could mean you lose your house. 

You can usually switch your mortgage any time after 6 months, but you might be subject to fees like an early repayment charge. If you don't remortgage after your current deal ends, you may be put onto the standard variable rate (SVR), which can be at a higher interest.
 
You can chat to one of our mortgage advisors to see if remortgaging is the right option for you.   

Depending on where you are in your mortgage deal, you may need to factor in the cost of an early repayment fee. Other potential costs include a product fee from the new lender, conveyancing and valuation fees, and the cost of a mortgage advisor. 

Yes – switching to a new mortgage deal with a new lender is known as remortgaging. However, unless you’re on your current lender’s standard variable rate, you may need to pay early repayment fees. 

Switching your mortgage or remortgaging to a new deal can save you money on interest. It can also unlock a more competitive mortgage deal, better terms, or allow you to pick a remortgage deal that best suits your needs.  

Just make sure to shop around and ensure you pick the right deal for you. You can also chat to one of our advisors if you’re not sure. 

The remortgaging process generally takes between 4 to 8 weeks. 

To find the best deal for you, research mortgage deals that fit your needs. Make sure to review deals outside of your current lender so that you understand everything on offer.  

You can also seek advice from a mortgage broker, who can help you understand the range of deals, guide you through the application process, and keep you informed on progress with your lender.