Understanding different types of mortgages

Fixed rate Mortgage

A fixed rate mortgage locks in the amount of interest you’ll pay for two to five years or longer. Your monthly payments stay the same, no matter what happens with interest rates. This can help you plan your budget more easily.

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 Bank of England Base Rate are not directly impacted by Bank Base Rate changes.

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 a reduction in your monthly payment.

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

Family assisted mortgages

Our Joint Mortgage Sole Proprietor mortgages use the income of a family member to increase your borrowing.

Shared Ownership and First Homes

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

Affordability Boost mortgage 

Our Affordability Boost range provides an alternative affordability assessment for fixed-rate mortgages exceeding five years, potentially 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 tailored to those in self-employment. We also accept applications from customers with only 1 years’ accounts so you could get on the property ladder sooner.

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 reduce 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 ensuring 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.