Mortgage Advice Covering The Different Types of Mortgages
Whether you happen to be a first time buyer in Halifax hoping to find your footing on the property ladder, or you are currently moving house in Halifax, it will become apparent soon enough that there are many different types of mortgages for customers to utilise.
Mortgage types describe different features. Fixed and tracker rates explain how interest is charged, while repayment and interest-only describe how you repay the loan. An offset mortgage links eligible savings to your mortgage to reduce the balance on which interest is charged. These features can overlap: for example, you can have a fixed-rate repayment mortgage.
What is a Fixed-Rate Mortgage?
A fixed-rate mortgage keeps your interest rate the same for an agreed period. Your monthly mortgage payments normally stay the same during that period, provided the other terms of your loan remain unchanged.
You can choose from the fixed-rate deals available from your lender, commonly lasting two, three or five years, with longer options sometimes available. Your rate stays fixed even if the Bank of England base rate changes during that period.
What is a Tracker Mortgage?
A tracker mortgage is where the interest-rate of your mortgage will follow along with the Bank of England’s base rate.
To simplify this for you, the mortgage lender that you end up with will not be the one to choose your interest-rate, and you won’t be deciding that either.
Instead, the interest-rate on your mortgage will be set at a percentage above the Bank of England base rate. For example, if the base rate is 1% and your mortgage is tracking at 1% above base rate, you will be paying a rate of 2%.
What is a Repayment Mortgage?
A repayment mortgage is the standard type of mortgage you will come across, paying back both a combination of interest and capital each month.
So long as you continue paying your mortgage per month, for the duration of your mortgage term, you will be guaranteed to have paid off your mortgage balance in full by the end of your term, owning the property.
In the early stages of your mortgage term, you’ll mainly be paying back the interest, with your balance reducing slowly, especially with a 25-30 year term.
Your mortgage will alter slightly towards the last ten years or so, as you will be paying off much more capital from your balance than you will be with interest, meaning your balance will come down a lot quicker.
What is an Interest-Only Mortgage?
Though you will see a lot of modern buy-to-let mortgages being set up as interest-only mortgages, it is a lot more difficult to obtain a residential interest-only mortgage.
It is not entirely impossible, though it is a lot harder to find these, as mortgage lenders may not offer these to customers.
They do become helpful though in relevant situations, such as potentially downsizing when you are older, or if you have external investments you can use to pay back the capital on the mortgage.
There are much stricter rules with interest-only mortgage products these days, with the loan-to-values on these being much lower than they would be in the past.
What is an Offset Mortgage?
By taking out an offset mortgage, your mortgage lender will be assigning a savings account to you, to run alongside your mortgage term.
The way that this works is that if you were to have a mortgage balance of £100,000 and £20,000 is deposited into your savings account, you would only be paying interest on the difference between that, which would be £80,000.
This is often considered to be a very efficient way of managing your money, especially if you are paying higher rates of tax.
Date Last Edited: October 20, 2026
