GetAnOffer Cheat Sheet: Mortgage Types Explained for First-Time Buyers

28 May, 2025

1. Fixed-Rate Mortgages

Best for: Budget-conscious buyers who want predictable payments.

With a fixed-rate mortgage, your interest rate remains the same for a set period—typically two, three, or five years, but it can be as long as 10. Once the fixed term ends, your deal reverts to the lender’s standard variable rate (SVR), which is usually higher. It’s wise to consider remortgaging at that point.

2. Tracker Mortgages

Best for: Buyers who can handle fluctuations in monthly payments.

A tracker mortgage follows the Bank of England base rate. This means your payments could rise or fall as the base rate changes. Some products are capped, so even if the base rate spikes, your rate won’t exceed a set limit.

3. Discounted Variable-Rate Mortgages

Best for: Those looking for a lower initial rate who can manage changes.

These mortgages offer a discount on your lender’s SVR for a period (usually two to five years). However, because your rate is still tied to the SVR, it can change, making it less predictable than a fixed-rate deal.

4. Offset Mortgages

Best for: Buyers with significant savings.

Offset mortgages let you link a savings account to your mortgage. You won’t earn interest on your savings, but they reduce the mortgage balance you're charged interest on. This could save you money over the long term.

5. Guarantor Mortgages

Best for: Buyers with low income or deposit but family support.

A guarantor mortgage allows a third party (often a family member) to guarantee the loan. If you miss repayments, the guarantor steps in. This extra security can help you get approved even with limited finances.

6. Interest-Only Mortgages

Best for: Buyers with a solid repayment plan for the future.

Here, you only pay the interest each month, not the loan itself. Your monthly outgoings are lower, but you must repay the full mortgage at the end of the term. These are riskier and usually suited to more experienced investors or those with clear repayment strategies.

Need Help Finding the Right Mortgage?

At GetAnOffer, we work with trusted mortgage advisors who can guide you to the right deal for your circumstances. Contact us today to get started on your home-buying journey!