Finding the best mortgage for you

You'll find plenty of interesting information about mortgages here, and you can use the following calculators to assist in your mortgage research, but please note that these calculators are supplied for general guidance only.

• Mortgage Calculator

Mortgages tailored to your needs

Your mortgage is probably the largest financial transaction and commitment you are likely to undertake. We recommend you seek mortgage advice which is individually tailored to your needs and requirements.

Gone are the days when a borrower was grateful to the lender for providing them with a mortgage facility. In today's marketplace, lenders are in competition with each other for your valuable business. They are therefore willing to offer incentives to entice you. But beware, you don't want them to snare you!

There are so many types of mortgage available that it is easy to become confused, possibly opting for the product offering the lowest headline rate of interest. But when booking and arrangement fees, conditional insurances, higher lending charges, lock-ins and early repayment charge are taken into account, the products may not be as attractive as you might have first thought.

Residential Mortgages

We have access to mortgage sourcing systems that are updated daily so that we can provide our clients with all the very latest mortgage offers. We can then offer mortgages suitable for each individual's requirements, so there's no need to look any further.

Commercial and Buy To Let Mortgages

Our understanding of the commercial and buy to let mortgage marketplace enables us to secure competitive rates with all the principal lenders. As with residential mortgages , we'll manage the whole process, liaising with Estate Agents, Accountants, Solicitors and Surveyors, ensuring that everything runs smoothly from start to finish.

We are also able to advise on commercial property portfolios, both in the UK and offshore, and advise on the most tax efficient ways of purchasing them.

Ways to repay your mortgage

There are various ways to repay your mortgage. Here is a brief outline of the more popular repayment methods, and their advantages and disadvantages.

Repayment mortgage

How does it work?

You borrow a lump sum over a fixed period of time (usually 25 years, but it can be less). You pay the interest and some of the capital on a monthly basis to the lender.

ADVANTAGES: The only way you can be 100% certain the loan will be repaid (provided you keep up with the repayments.)

DISADVANTAGES:Only a small amount of capital is paid off in the early years.

Interest-only mortgage

How does it work?

Your monthly payments represent only the interest due to the lender, and do not include repayment of capital. Your total loan must be repaid at the end of the mortgage term. You may therefore need to arrange additional investments which will generate sufficient capital to repay the loan.

ADVANTAGES: You can choose from a variety of investments, some of which have tax advantages. Should you move or arrange a remortgage, your investment can usually be reallocated to the new mortgage.

DISADVANTAGES: Unlike a repayment mortgage, the amount of debt outstanding does not reduce over time, and there is no guarantee that the investments chosen will grow sufficiently to repay your loan. Also, investment-linked interest-only mortgages can be slightly more expensive than repayment mortgages.

Three well known types of interest-only mortgages are:

ENDOWMENT MORTGAGE

How does it work?

You make two payments per month. One to the lender to repay the interest on the amount borrowed, the other to an insurance company for an endowment contract. There are mainly two types of endowment: unit linked or with profits. Both invest in a broad range of assets including stocks and shares. The capital in the endowment builds up over the term of the mortgage to repay the outstanding capital.

ADVANTAGES: This one's very flexible. You can take the endowment policy with you if you move home or change mortgage lender. Endowments usually include some kind of life cover and some also include critical illness cover. This can be a cheaper method of buying such cover under usual conditions. If the endowment contract performs well, you may accumulate more funds than required to repay the loan. However, endowments are not risk- free as there is some investment in the stock market.

DISADVANTAGES: There is a possibility your fund may not build up sufficiently to repay the capital. Taking financial advice, carrying out regular reviews and generally keeping a watchful eye on your fund's performance will help to prevent this happening.

PENSION MORTGAGE

How does it work?

You make two payments per month. One to the lender to repay the interest on your borrowings and another into a personal pension plan. The aim is to build up your pension fund sufficiently to repay the loan and to provide you with a retirement income.

ADVANTAGES: Has tax advantages, as the contributions you make to the pension plan attract tax relief at the highest rate of tax you pay.

DISADVANTAGES: You must ensure your pension is well funded to ensure you have sufficient to repay your loan and provide for your retirement. The tax free lump sum which is paid on retirement is used to repay the mortgage loan, but there is no guarantee that there will be sufficient funds to do so.

INDIVIDUAL SAVINGS ACCOUNT (ISA)

How does it work?

You make a monthly payment to the lender to repay the interest on the amount borrowed, and start to invest into an ISA plan. The capital in the plan builds up over the term of the mortgage to repay the outstanding capital. ISAs allow you to invest in cash and stocks and shares, and work in much the same way as the endowment method.

ADVANTAGES: Your money could grow faster within an ISA fund than an endowment because of tax advantages and because ISAs invest most of your money into stocks and shares. This means they can grow very quickly if the stock market performs well. On the other hand, if there's a stock market slump, there's a risk that you may not be able to pay off your loan at the end of its term. They are more flexible than endowments and can work out cheaper.

DISADVANTAGES: Risk - Stockmarket fluctuations could adversely affect the value of the plan, as your capital is not guaranteed. Therefore, there is no certainty that you will be able to repay the mortgage. Also, you need to arrange separate life and ill health cover, if appropriate. There is no guarantee ISAs will continue indefinitely. ISA contributions are currently restricted to a maximum of £7,200 in any tax year.

With all these ways to repay your mortgage, then (with the exception of the repayment method), regular reviews should be carried out to ensure you have sufficient funds to repay your mortgage loan at maturity.

Mortgage protection

Mortgage Protection is a type of life insurance that makes sure your mortgage can be fully repaid in the event of your death. Mortgage Protection is recommended, and sometimes insisted upon by building societies and mortgage companies. If you have a mortgage that you to wish to maintain on your family's behalf should you die or you don't want to force your dependents to sell the family home in order to pay off the mortgage, you should consider Mortgage Protection.

The main benefit of Mortgage Protection is that it is specifically designed to pay off your mortgage and is carefully calculated to provide the right amount of cover therefore tailored to your individual circumstances. Mortgage Protection also enables your dependants to make funds available to meet other expenses rather than having to concentrate on the mortgage, to give them a greater degree of financial freedom and flexibility.

Conveyancing

Conveyancing is the legal act of transferring the ownership of a property from one person to another. The buyer needs to ensure that he or she gets good 'title' to the land or lease; i.e. that the person selling the house actually has the right to sell it. The system of conveyancing is designed to ensure that the buyer gets the property together with all the rights that go with it, and knows about any restrictions in advance.

Through advances in information technology the cost of this work has reduced significantly. Via our association with eCoveyancer we are now pleased to offer you the facility to:

Plus, assuming you are happy with your illustration, you can instruct the solicitor straight away.

Personal Tax Returns and advising Private Clients on how to best minimise their Income and/or Capital Gains
Tax liabilities.

With a competitive pricing structure we are sure you will be getting the best possible service at prices starting from £199 per Tax Return.

For further information on how Arcus Taxation Accountants can help you then please click here