Residential Mortgage

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Looking for a Residential Mortgage?

Residential mortgages are the largest and most common forms of credit in the UK and are the reason millions of us can buy our dream homes.

The average property in the UK is valued at £225,621 (accurate as of January 2018) and homes cost even more in London, where the average is well over £400,000. Unless you’re lucky enough to have hundreds of thousands of pounds in savings, you will need to borrow a great deal of money to get one step closer to your ideal home. This is where a residential mortgage comes in.

What is a Residential Mortgage?

A residential mortgage is a long-term loan that is taken out by one or more individuals to buy a home or other residential property. Whether you are a first-time buyer, moving home or remortgaging, a residential mortgage is the type of mortgage you will probably need.

With a residential mortgage, the home must be used as a residence by the borrowers, not rented out to tenants or used for commercial purposes.

However, the process of finding the best residential mortgage to match your circumstances is no easy job and it can cause some difficulties, especially if you don’t know what you’re looking for. There are different types of residential mortgages to choose from: fixed rate, variable and tracker mortgages.

If you’re unsure of the best one for you, we can help match you up with the most suitable type for your needs.

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How Much Deposit Do I Need?

If you’re considering a residential mortgage, they will require a cash deposit of typically between 10-30% of a home’s value. For example, a mortgage on a £200,000 home would likely require an upfront deposit of anything between £20,000 and £60,000.

Some residential lenders could ask for less than a 10% deposit to entice first-time buyers, and the government’s Help to Buy scheme means those who qualify only need to stump up as little as 5% of the value of your home.

Loan To Value Ratio (LTV)

Your loan to value is the amount borrowed set against the value of the property.

For example, if you have a deposit of £40,000, you will need £160,000 to be able to afford a £200,000 property. Borrowing £160,000 for a £200,000 home gives you an 80% loan to value ratio, with your £40,000 deposit accounting for the remaining 20%.

Loan to value ratios of 80% and lower are typically seen as low LTV ratios, whereas LTV’s over 90% are considered high. The lower the ratio, the smaller the risk for the lender and the better the interest rates offered to the borrower.

How Much Can I Borrow?

You can find out how much you can borrow by utilising our free mortgage calculator, where you can find out the amount you can borrow and what the monthly repayments will be like, over a set period of time.

We’ll help you find the right mortgage for you

The process of finding the best mortgage for you can be stressful if you do it alone, but regardless of whether you are a first-time buyer, home mover, buying to let or you are looking to remortgage, we can help you find the best deal.

We know that when you’re looking to buy a property, there are two vital things to consider: how much you can borrow and how much your mortgage is going to cost, once you factor in the interest.

As an independent mortgage broker, our experts have access to over 40 lenders offering hundreds of different products. So we’re bound to find one that suits your needs best.

All you need to do is get in touch and we can help you get the ball rolling.