When considering the different types of mortgages, we believe it is important you consider the whole deal. For example, if you opt for a mortgage with a special incentive period, you need to pay particular attention to what you will be paying during and at the end of this period because your payments may increase.
When an incentive period ends, the mortgage usually changes to the variable rate. This rate may go up and down.
For example, if interest rates have risen sharply during your incentive period and remain high, your mortgage payment could be significantly higher when your incentive period ends - making it more difficult for you to afford the repayments. One of our mortgage advisers will be pleased to talk to you about this.
To enable you to have the facts and figures you need, you will receive a financial illustration (called a Key Facts Illustration - KFI), which will outline the level of payments for the mortgage type chosen, as well as what might happen if rates increase. The KFI will also show any early repayment charges which apply.
Mix and match options
Whatever your circumstances, with Skipton you can choose more than one product to suit your personal requirements. In such cases, the highest product fee of those chosen will apply.
You can also have a 'mix and match' in your repayment method such as a part repayment and part interest-only mortgage, should you already feel you have the means for repaying part of the sum you are borrowing, for example, by using an endowment policy. Equally you may anticipate an increase in your income over the coming years and foresee overpayments as the key to reducing your loan. See the 'Other information to consider' section where we explain these options in more detail.
TIP
When deciding which mortgage product is best for you, take a realistic view of what is likely to happen to your income over the next few years. For example, do you expect your income to rise gradually through annual pay increases or more sharply – perhaps through rapid promotion or job change? Or your cost of living may go up if you have a family for example, or indeed your income could go down. So whatever happens to your income, it can have an important bearing on the type of mortgage you choose.