Providing expert mortgage advice for over 28 years.
Providing expert mortgage advice for over 28 years.
We’ve answered 20 of the most common mortgage questions people will ask in 2025. So whether you’re buying your first home, moving home, or looking for a new mortgage, this guide is here to help.
What’s happening with mortgage rates? We explain how interest rates change in the current market and what that means for your monthly payments.
We explain the different types of mortgages. We break down fixed, variable, repayment, and interest-only mortgages so you can figure out which best suits your goals.
What other costs should I expect? It’s not just about the deposit. We cover all the extra costs, such as solicitor fees, valuation charges, and other third-party costs, so there are no surprises.
Simple ways to try and save money: Learning how to overpay when you can, choosing the right loan type, and comparing your options early can likely help you spend less over time.
Forecasters predict the Bank of England will implement further interest rate cuts in 2025. They also suggest that UK mortgage rates will gradually decline throughout the year, which could result in lower borrowing for homeowners. It’s essential to approach this prediction cautiously, as recent market uncertainties and rising inflation could slow down future rate movements.
If you see a mortgage deal that works for your budget, it could be worth using a rate lock to secure that interest rate for a set period of time. That way, you won’t miss out if rates increase again.
Most lenders will offer around 4 to 4.5 times your gross monthly income (that’s your income before tax). But they’ll also look at:
Your credit history
Any debts, like student loans or credit cards
Your regular outgoings, such as bills, childcare, subscriptions, etc.
A mortgage in principle is a great first step. It gives you a rough figure of what you could borrow and shows estate agents you’re a serious buyer. You can also try our mortgage calculator to get a quick idea of how much you can borrow.
Usually, you’ll need at least 5% of the property’s purchase price as a deposit. For example, if you’re buying a £200,000 home, you’d need a minimum of £10,000.
But saving a larger deposit, say 10% or 15%, can help you get a lower interest rate and better mortgage options. A bigger deposit also means a smaller loan and lower monthly payments.
Fixed-rate mortgage: Your interest rate stays unchanged for several years, usually 2, 5, or 10. That means your monthly payments won’t change, which is ideal for budgeting.
Variable-rate mortgage: Your interest rate can go up or down, often following the Bank of England’s base rate. You might pay less when rates fall, but you could face a higher monthly payment if they rise.
When deciding between a fixed or variable rate, ask yourself: Do I want peace of mind, or am I okay with some uncertainty?
There are a few home buying schemes that can give buyers, especially first-time buyers, a head start:
Mortgage Guarantee Scheme – Helps buyers with smaller deposits by giving lenders extra confidence.
Shared Ownership – lets you buy part of a home and pay rent on the rest. You can buy more shares later.
Lifetime ISA – A savings account where the Government adds a 25% bonus to help you buy your first home.
Each has its own rules, so it’s best to check with us to see what you’re eligible for and which one best fits your financial goals.
Repayment mortgage: This type of mortgage allows you to repay the loan and interest monthly, and in the end, your mortgage is completely paid off.
Interest-only mortgage: You pay interest only for a period of time, usually several years. Ultimately, you still owe the full loan amount, so you’ll need a solid repayment plan, such as savings or selling another property.
Repayment mortgages are far more common, especially for first-time buyers.
This depends on your plans and how stable you want your payments to be:
2 or 5 years: Offers more flexibility if you move or remortgage soon.
10 years: Great if you’re staying put and want steady payments for a long period of time.
Just be aware that long fixes often come with early repayment charges if you want to leave the deal early.
Yes, you can. Most lenders will ask for:
2–3 years of tax returns
Proof of consistent income
Business accounts, if you have them
A larger deposit and a healthy credit score can also help your mortgage approval go more smoothly.
Buying a home comes with more than just a deposit. You’ll also need to budget for other costs, including:
Solicitor or conveyancing fees
Valuation fees (the lender’s check on the property)
Arrangement fees (sometimes charged by your lender)
Stamp Duty (for homes over a certain value)
Possible third-party charges (like searches and ID checks)
Moving costs, such as removal companies
Your mortgage lender will give you a Key Facts Illustration, which shows a full breakdown before you commit. Newhomes will advise you of additional charges and fees.
Lenders check your credit history to see how reliably you’ve handled money in the past. A higher credit score can mean better rates and more payment options.
If your score is lower, you might still get a mortgage, but you could face higher interest rates or need a bigger deposit.
Tip: Check your credit report early and fix any issues before you apply.
To apply for a mortgage, you’ll need to provide:
Proof of ID (like a passport or driving licence)
Proof of income (payslips, tax returns, or bank statements)
Details of any existing debts or regular spending
Having these ready can speed up your application.
Yes! Many mortgages let you pay up to 10% more than your usual amount each year without a penalty. This helps:
Reduce the amount of interest you pay
Shorten the life of the loan
Save you much money over time
Always check your deal’s terms before making overpayments.
Remortgaging means switching to a new mortgage deal, either with your current lender or a new one. You might do this to:
Get a better rate
Borrow more money
Change how long you take to repay your mortgage.
It’s wise to start comparing mortgage deals about six months before your current one expires, especially if you’re coming off a fixed-rate term. Our team of experts can help you lock in a new rate and answer any questions.
A rough guide is to keep your monthly mortgage payment under 30% of your gross household income. But you should also consider:
Bills and subscriptions
Council tax and homeowners’ insurance
Other monthly expenses
Using our mortgage calculator can give you a clearer picture.
LTV shows how much of the home’s value you’re borrowing.
For example, if a house costs £200,000 and your deposit is £40,000, your loan is £160,000. That’s an 80% LTV.
The lower your LTV, the better your chance of getting a lower rate and a wider choice of deals.
Yes, and they’re designed to help you get on the ladder.
Some lenders offer first-time buyer mortgages with lower fees or cashback. You may also be eligible for Government help through the Mortgage Guarantee Scheme, Shared Ownership, or a Lifetime ISA.
Speaking to our expert mortgage advisers can help you understand your options.
If you’re on a variable mortgage, your payments could go up. If you’re on a fixed-rate mortgage, your payments stay the same until your deal ends.
When comparing mortgages, look at the Annual Percentage Rate of Charge (APRC), which gives you a better idea of the total cost over time.
Missing a mortgage payment can affect your credit score and lead to late fees. If you fall behind more than once, your home could be repossessed.
If you struggle to pay your mortgage, speak to your lender early; they might offer payment assistance or flexible options.
Yes, this is called porting your mortgage. If your lender allows it, you can take your current mortgage deal with you to a new home. But you’ll still need to pass affordability checks on the new property.
Shared ownership lets you buy a share of a property (usually 25%–75%) and rent the rest. Later, you can buy more of the home through a process called staircasing.
It can be a good option if you can’t afford to buy 100% of a home upfront.
Whether you’re buying your first home or looking for a new deal, Newhomes is here to help. Our friendly advisers will explain your options and help you find a suitable mortgage.
Need some guidance? Get in touch today for personalised advice.
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At New Homes Mortgage Services LLP, we strive to provide accurate and up-to-date information at the time of publication. However, due to the dynamic nature of the property market, details may change and this content is intended for general informational purposes only. It does not constitute financial or professional advice and should not be relied upon as such.
We cannot accept responsibility for any decisions made based on this information. For advice tailored to your individual circumstances, please consult our qualified mortgage advisors. We recommend that you independently verify any important details before making financial commitments.
