Residential mortgages

Typically, lenders allow you to borrow 4 – 6 times your annual income, though this varies depending on affordability checks and any existing debts.

A fixed-rate mortgage keeps your interest rate (and monthly payments) the same for a set period. A variable-rate mortgage can go up or down depending on the lender or the Bank of England base rate.

On average, a mortgage application can take 4 – 6 weeks to be approved, though this can be longer if the lender needs more information or the property survey takes time.

When you take out a residential mortgage, you will need to decide how you want to repay it. The main repayment types are:

• Repayment (capital and interest): Each monthly payment goes towards both the interest and a portion of the loan itself. By the end of the term, your mortgage is fully paid off. This is the most common option for homebuyers.
• Interest only: Your monthly payments only cover the interest, so the loan balance does not reduce. At the end of the term, you will need a separate plan in place (such as savings or investments) to repay the original loan.
• Part repayment, part interest only: A blend of the two approaches. Part of your mortgage reduces over time, while the rest remains as interest only until the end of the term.

Each option has pros and cons depending on your circumstances, goals and affordability. At The Penny Group, we will explain these in plain English and help you decide which repayment method works best for your financial future

Typically, residential mortgage terms range from 5 – 40 years, depending on the age of the applicant.

It can be more challenging, but there are lenders who specialise in helping borrowers with less-than-perfect credit histories.