A mortgage is "the pledging of property to a creditor as security for the payment of a debt." In plain terms, it is the legal contract that says if you don't pay the loan back (along with all of the fees and interest that are included with it), then the lender can have your house.
- You take out a loan based on how much you can afford and the value of the property, for a length of time agreed between you and the lender
- You are charged interest on the loan, usually based on the Bank of England base rate, which is reviewed monthly
- You pay the mortgage back in one of two ways, repayment or interest-only
- You can choose different deals for your interest rate, such as fixed or discounted
- If you've had financial problems in the past and are finding it difficult to get a mortgage, the Council of Mortgage Lenders (CML) has a leaflet that may help.
