Understanding different types of mortgages

Fixed rate mortgage

A type of mortgage where the rate of interest you pay is fixed for a period of time, often two to five years or longer. This means your interest rate stays the same throughout the fixed period, no matter what happens to interest rates. This type of mortgage may help if you are wanting peace of mind knowing your payments stay the same during the fixed period.

Discounted variable rate mortgage

A discounted variable rate mortgage offers an initial discount from our Standard Variable Rate. If our Standard Variable Rate changes the rate you pay will change as well. If the rate goes up then your payment will increase, if the rate goes down your rate will also decrease. These mortgage types are linked to our Standard Variable Rate and whilst influenced by the Bank of England Base Rate are not directly linked to the Bank of England Base Rate. 

Base rate tracker mortgage

A base rate tracker mortgage tracks the Bank of England Base Rate. If the rate increases then your payment will increase, if the base rate falls you will benefit from lower monthly payments.

There are a number of mortgage types for those in particular circumstances, including:

Assisted mortgages

Our Joint Mortgage Sole Proprietor mortgages use the income of an additional borrower, such as a family member or a friend, to increase your borrowing.

Shared Ownership and First Homes

Chat to us about our assisted purchase schemes which give another option for you to get on the ladder.

Affordability Boost mortgage 

Our Affordability Boost range offers an alternative affordability assessment for fixed-rate mortgages exceeding five years, possibly allowing you to borrow more based on your financial situation.

Self-employed mortgage

More people are becoming self-employed every year, and at Newcastle Building Society we don’t think being self-employed should stop you from getting a mortgage. That’s why we created a specific range of products for those in self-employment. We also accept applications from customers with only 1 year's accounts so you could get on the property ladder sooner.

First Step

Our First Step (up to 98% loan-to-value) mortgage is designed to help first time buyers get on the property ladder sooner with a smaller up-front cost. 

As well as mortgage type, there are payment choices available for you to consider.

Repayment mortgage

This involves paying back the interest on the amount borrowed from us as well as paying off the capital borrowed. At the end of the mortgage term you will know that you have repaid all the interest and the capital, so you will own your home outright.

Interest only mortgage

By selecting an interest only mortgage, you will only pay interest (on a monthly basis) and not lower the amount you have borrowed, known as the capital balance. This means that you’ll need a plan in place (e.g. endowment policy, ISA, sale of property) to repay the balance at the end of your term.

You are responsible for making sure that you will be able to pay off the capital borrowed at the end of the mortgage term and it is important that you regularly check your mortgage repayment plan to make sure it’s on track to repay the loan amount when your mortgage comes to an end.