UK Mortgage FAQs: Your Questions Answered

This guide answers 50 of the most common mortgage questions asked by UK homebuyers, remortgagers and property investors. Each answer is written in plain English and links to the relevant Mortgage One guide where you can explore the topic in more detail. Whether you are buying your first home, reviewing your options at the end of a fixed rate or considering a buy-to-let investment, this page is designed to give you a practical starting point.

Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

For a free initial consultation about any mortgage question, call 01202 155992 or contact Mortgage One.

How Mortgages Work

1. What is a mortgage?

A mortgage is a loan secured against property. You borrow money to buy a home and repay it over an agreed term, typically 25 to 30 years. Each monthly payment covers interest and, on a repayment mortgage, part of the capital balance. If you do not keep up repayments, the lender has the right to repossess the property.

2. What is the difference between a repayment mortgage and an interest-only mortgage?

With a repayment mortgage, each monthly payment reduces the loan balance so the mortgage is fully repaid by the end of the term. With an interest-only mortgage, you pay only the interest each month and must repay the full loan at the end of the term using a separate repayment strategy. Mortgage One’s interest-only mortgages guide explains the requirements and risks.

3. How long does a mortgage term last?

Most mortgages run for 25 years, but terms from 5 to 40 years are available. A longer term reduces monthly payments but increases the total interest paid over the life of the loan. A shorter term costs more each month but clears the debt sooner.

4. What happens at the end of my mortgage deal?

When your fixed, tracker or discount period ends, you move onto your lender’s standard variable rate, which is usually higher. At this point you can remortgage to a new deal, either with your existing lender or a different one. Mortgage One’s remortgaging guide explains how and when to switch.

5. How are monthly mortgage payments calculated?

Payments are calculated based on the loan amount, interest rate and term. Mortgage One’s mortgage repayments calculator can give you an estimate based on different loan sizes and rates.

Mortgage Types and Rates

6. What is a fixed-rate mortgage?

A fixed-rate mortgage locks your interest rate for a set period, typically two or five years. Your monthly payments stay the same regardless of what happens to the Bank of England base rate. Mortgage One’s fixed-rate mortgage guide covers the pros, cons and when fixing makes sense.

7. What is a tracker mortgage?

A tracker mortgage follows the Bank of England base rate at a set margin above or below it. Your payments move up or down as the base rate changes. Mortgage One’s tracker mortgage guide explains how these work and who they suit.

8. What is a standard variable rate?

The standard variable rate is a lender’s default rate, applied once your initial deal ends. It is usually higher than fixed or tracker rates and can change at any time at the lender’s discretion. Mortgage One’s SVR guide explains why most borrowers should avoid staying on it.

9. What is an offset mortgage?

An offset mortgage links your savings to your mortgage so you only pay interest on the difference. For example, if your mortgage is £200,000 and you have £30,000 in savings, you pay interest on £170,000. Mortgage One’s offset mortgages guide explains how they work.

10. Will mortgage rates go down?

Mortgage rates are influenced by the Bank of England base rate, swap rates and lender competition. The base rate has been held at 3.75% since December 2025, and the outlook for further cuts in 2026 is uncertain due to global energy price pressures. Mortgage One’s rate forecast page tracks the latest market expectations.

11. Why do mortgage rates not always follow the base rate?

Fixed mortgage rates are priced primarily off swap rates, which reflect market expectations of future interest rates over two or five years. If markets expect rates to stay higher for longer, swap rates remain elevated even if the base rate is cut. Lender funding costs and competition also play a role.

Affordability and Deposits

12. How much can I borrow?

Most lenders offer between 4.5 and 6 times your annual income, although some will go higher for certain professions or with larger deposits. Mortgage One’s income multiples guide explains how different lenders calculate borrowing limits.

13. How do lenders assess affordability?

Lenders look at your income, regular outgoings, existing debts and living costs. They also stress-test your ability to repay at a higher interest rate. Mortgage One’s mortgage affordability guide covers the full assessment process.

14. How much deposit do I need?

The minimum deposit is typically 5% of the property price, although 10% or more gives access to better rates. Some schemes and lenders accept smaller deposits in specific circumstances. Mortgage One’s mortgage deposits guide explains how deposit size affects your options.

15. What does loan-to-value mean?

Loan-to-value is the ratio of your mortgage to the property’s value, expressed as a percentage. A £180,000 mortgage on a £200,000 property is 90% LTV. Lower LTV generally means lower interest rates because the lender’s risk is reduced.

16. Can I use a gifted deposit?

Most lenders accept gifted deposits from close family members. The person gifting the money will need to sign a declaration confirming it is a gift with no expectation of repayment and no interest in the property.

The Application Process

17. What is an agreement in principle?

An agreement in principle is a preliminary indication from a lender that they would be willing to lend you a certain amount, based on basic information about your income and credit. It is not a guarantee of a mortgage offer. Mortgage One’s mortgage application guide explains each stage of the process.

18. What documents do I need for a mortgage application?

You will typically need proof of identity, proof of address, recent payslips or self-employed accounts, bank statements covering the last three months, and details of any existing debts or financial commitments.

19. How long does a mortgage application take?

From application to offer, the process typically takes two to six weeks for straightforward cases. Complex applications, such as those involving self-employed income or non-standard properties, can take longer.

20. Can a mortgage offer be withdrawn after it is issued?

Yes. A lender can withdraw an offer before completion if your financial circumstances change, if the property valuation raises concerns, or if the product is withdrawn from the market. Avoid taking on new debt or changing jobs between offer and completion.

21. What does a mortgage valuation involve?

The lender arranges a valuation to confirm the property is adequate security for the loan. It is not a detailed survey of the property’s condition. A separate property survey is recommended. Mortgage One’s property survey guide explains the different survey levels and when each is appropriate.

Credit and Eligibility

22. What credit score do I need for a mortgage?

There is no single score required. Each lender uses its own credit scoring system and criteria. A higher score improves your options and may unlock better rates. Mortgage One’s guide to improving your credit score explains what steps you can take before applying.

23. Can I get a mortgage with bad credit?

Yes, although your options will be more limited and rates may be higher. The severity and age of the adverse credit matters. Some specialist lenders consider applicants with defaults, CCJs or missed payments. Mortgage One’s bad credit mortgage guide covers what is available.

24. Does applying for a mortgage affect my credit score?

A full mortgage application leaves a hard search on your credit file, which can temporarily lower your score. An agreement in principle may use a soft search, depending on the lender. Mortgage One’s mortgage credit check guide explains the difference.

25. Why was my mortgage application declined?

Common reasons include insufficient income, too much existing debt, poor credit history, a small deposit or property issues. A decline from one lender does not mean every lender will say no. Mortgage One’s declined applications guide explains the next steps.

26. What lending criteria do mortgage lenders use?

Lenders assess your income, credit history, deposit, outgoings, employment type and the property itself. Criteria vary significantly between lenders. Mortgage One’s mortgage lending criteria guide explains the main factors and how different profiles are assessed.

To discuss your mortgage options, call 01202 155992 or contact Mortgage One.

First-Time Buyers

27. How do I get a mortgage as a first-time buyer?

Start by checking your credit report, saving a deposit and getting an agreement in principle. A mortgage broker can search the market for the most suitable deal. Mortgage One’s first-time buyer mortgage guide covers the full process step by step.

28. Do first-time buyers pay stamp duty?

First-time buyers in England and Northern Ireland pay no Stamp Duty Land Tax on properties up to £300,000. On properties between £300,001 and £500,000, a reduced rate of 5% applies to the portion above £300,000. Properties above £500,000 do not qualify for first-time buyer relief. Mortgage One’s stamp duty calculator can give you an estimate.

29. What government schemes are available for first-time buyers?

Shared ownership allows you to buy a share of a property and pay rent on the remainder. The mortgage guarantee scheme supports 95% LTV lending. Availability and eligibility vary. Mortgage One’s shared ownership guide explains how these work.

30. Can my parents help me buy a home?

Yes, through gifted deposits, guarantor mortgages or joint borrower sole proprietor arrangements. Each option has different implications for your parents and for the mortgage structure. A broker can explain which approach suits your circumstances.

Remortgaging and Additional Borrowing

31. What is remortgaging?

Remortgaging means replacing your existing mortgage with a new deal, either from your current lender or a different one. Most people remortgage when their initial rate period ends, to avoid moving onto a more expensive standard variable rate.

32. When should I start looking at remortgage options?

Most lenders allow you to apply for a new deal up to six months before your current rate expires. Starting early gives you time to compare the market and lock in a rate without rushing.

33. Can I borrow more when I remortgage?

Yes, if you have sufficient equity and can pass the lender’s affordability assessment. Additional borrowing can be used for home improvements, debt consolidation or other purposes. Mortgage One’s further advance and additional borrowing guide explains the alternatives.

Think carefully before securing other debts against your home.

34. What are early repayment charges?

Early repayment charges are fees your lender charges if you repay your mortgage or switch to a new deal before the initial rate period ends. They are typically between 1% and 5% of the outstanding balance and reduce each year of the deal.

Buy-to-Let

35. How do buy-to-let mortgages work?

Buy-to-let mortgages are assessed primarily on the expected rental income rather than your personal income. Most lenders require the rental income to cover at least 125% to 145% of the mortgage payment at a stress-tested rate. Mortgage One’s buy-to-let mortgage guide covers the criteria in detail.

36. Do I need a bigger deposit for a buy-to-let?

Yes. Most buy-to-let lenders require a minimum deposit of 25%, although some accept 20% for certain products. A larger deposit unlocks better rates and a wider choice of lenders.

37. Should I buy a rental property through a limited company?

Buying through a limited company can be more tax-efficient for higher-rate taxpayers because mortgage interest remains fully deductible against rental income within a company structure. However, the mortgage products available and the setup costs differ. Mortgage One’s limited company buy-to-let guide explains the key considerations.

38. Can I let out my current home?

If you want to let out a property that has a residential mortgage, you will usually need your lender’s consent to let, or you may need to switch to a buy-to-let mortgage. Letting without permission can breach your mortgage terms.

Self-Employed and Complex Income

39. Can I get a mortgage if I am self-employed?

Yes. Most lenders require at least two years of trading history, supported by SA302 tax calculations and tax year overviews. Some lenders accept one year with strong figures. Mortgage One’s self-employed mortgage guide covers how different lenders assess self-employed income.

40. How do lenders assess contractor income?

Some lenders assess contractors on their day rate multiplied by five working days and 46 to 48 weeks, rather than requiring two years of accounts. This can significantly increase borrowing capacity. Mortgage One’s contractor mortgages guide explains which lenders use this approach.

41. Can I use bonus or overtime income for a mortgage?

Most lenders will consider regular bonus, overtime or commission income, although they typically use an average over the last two years rather than the most recent figure. Some lenders are more generous than others in how they treat variable income.

42. What if I have multiple income sources?

Lenders can consider income from employment, self-employment, pensions, investments and rental properties. How they combine and assess multiple sources varies, so a broker can identify which lender takes the most favourable view of your overall income picture.

Specialist and Other Mortgage Types

43. Can I get a mortgage on a second home?

Yes, although deposit requirements are typically higher and the 5% additional property stamp duty surcharge applies in England and Northern Ireland. Mortgage One’s second home mortgage guide covers the criteria, costs and tax implications.

44. What is equity release?

Equity release allows homeowners aged 55 and over to access the value tied up in their property without selling it. It works differently from a standard mortgage and is not suitable for everyone. Mortgage One’s equity release guide explains the options and risks.

Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.

45. Can I get a mortgage on a non-standard construction property?

Yes, although not all lenders accept properties built with non-standard materials such as concrete panel, steel frame or timber frame. A broker with whole of market access can identify the lenders who will consider the specific construction type. Mortgage One’s non-standard construction guide covers the main build types and lending options.

46. Do I need mortgage protection insurance?

It is not a legal requirement, but protecting your ability to meet mortgage repayments if you become ill, have an accident or die is strongly recommended. Mortgage One’s mortgage protection and insurance guide explains the main types of cover.

Using a Mortgage Broker

47. What is a whole of market mortgage broker?

A whole of market broker can consider products from across the entire intermediary-accessible lending market, rather than being limited to a panel of lenders. This means the advice is based on a broader range of options. Mortgage One’s whole of market guide explains what this means in practice.

48. How do mortgage brokers get paid?

Brokers may charge a fee to the client, receive commission from the lender, or a combination of both. Mortgage One will always disclose fees upfront. The Mortgage One guide to how brokers find you competitive rates explains how broker access can work in your favour.

49. Can a broker access deals I cannot find myself?

Yes. A number of lenders offer mortgage products exclusively through intermediaries. These broker-only deals are not available to borrowers who apply directly to the lender or use comparison websites.

50. When should I speak to a mortgage broker?

As early as possible. A broker can give you a realistic idea of what you can borrow, identify any issues with your credit or income that need addressing, and help you prepare before you start viewing properties.

For a free initial consultation, call 01202 155992 or contact Mortgage One.

The information provided in this article is for general guidance only and does not constitute personal or regulated financial advice. If you’d like to understand what these moves could mean for you, speak to Mortgage One. We can explain your options and timings based on your specific circumstances.

Some Buy to Let mortgages are not regulated by the Financial Conduct Authority.