HOW MORTGAGES WORK

How mortgages work

• 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– see Types of mortgage.
• You can choose different deals for your interest rate, such as fixed or discounted – see Types of interest rate deals.