Mortgage Types Guide
A residential mortgage is a type of loan used to purchase a property that will be used as the borrower’s primary residence. This type of mortgage is usually provided by a bank, building society, or other financial institution, and is secured against the property being purchased.
With a residential mortgage, the borrower usually makes a deposit towards the purchase price of the property, and then borrows the remaining amount from the lender. The borrower then makes monthly mortgage repayments to the lender, which typically include both the principal amount borrowed and the interest charged on the loan.
Residential mortgages are available in a range of different types, including fixed-rate mortgages, variable-rate mortgages, and tracker mortgages. The interest rate on a residential mortgage can be either fixed for a set period of time or can fluctuate over the term of the loan, depending on the type of mortgage and the lender’s policies.
In order to be eligible for a residential mortgage, borrowers must meet certain criteria, such as having a good credit history, being able to afford the mortgage repayments, and having sufficient income to support the loan. The amount that can be borrowed through a residential mortgage will also depend on a range of factors, including the borrower’s income, credit history, and the value of the property being purchased.
Overall, a residential mortgage is a common way for people to purchase a home, and can provide a reliable and affordable way to finance a property purchase over the long term.
A buy-to-let mortgage is a type of mortgage that is specifically designed for people who want to buy a property with the intention of renting it out to tenants. Buy-to-let mortgages are not available to people who intend to live in the property themselves.
Unlike a residential mortgage, which is based on the borrower’s income and ability to make repayments, a buy-to-let mortgage is generally based on the expected rental income of the property. Lenders will typically require the rental income to be at least 125-145% of the mortgage payments (depending on your personal tax status) at a predetermined interest rate, depending on the product type selected, to ensure that the borrower can afford to make the repayments even if the property is unoccupied for a period of time.
Where there is a shortfall in the rental income required, some lenders will allow a borrower to ‘top slice’.
Top slicing is where a mortgage lender considers the borrower’s overall income and assets, rather than just the rental income generated by the property when assessing affordability for the mortgage. This means that if the rental income is not sufficient to meet the lender’s affordability criteria, the borrower may be able to use their personal income or other assets to “top up” the rental income and meet the lender’s requirements.
Top slicing is typically used for borrowers with a high net worth or significant income from other sources who are looking to invest in property but may not meet the strict rental income requirements of some lenders. However, it is important to note that not all lenders offer top slicing, and the specific terms and criteria may vary depending on the lender and the product being offered.
Buy-to-let mortgages can come with higher interest rates and fees than residential mortgages, as they are considered higher risk. However, they can also offer the potential for income and capital growth if the property increases in value over time.
It’s important to carefully consider the costs and risks associated with buy-to-let mortgages, including the costs of maintaining the property, finding tenants, and the possibility of void periods when the property is unoccupied. It’s also important to comply with all legal requirements for landlords, including obtaining the necessary licenses and complying with health and safety regulations.
Ltd Company BTL Mortgages
A limited company buy-to-let mortgage is a type of mortgage designed for landlords who own rental properties through a limited company structure rather than as an individual. In recent years, many landlords have started to use limited companies as a way to hold their buy-to-let properties, in part because of changes to tax rules that make it less beneficial for individuals to hold rental properties.
With a limited company buy-to-let mortgage, the lender provides funding to the limited company rather than to the individual landlord. The limited company is then responsible for managing the rental properties, including finding tenants and maintaining the properties.
Limited company buy-to-let mortgages can offer several benefits to landlords, including tax advantages and limited liability protection. However, they can also come with higher interest rates and fees than individual buy-to-let mortgages, as they are considered higher risk.
It’s important for landlords to carefully consider their options and seek advice from a qualified professional, such as a financial advisor or accountant, before deciding whether a limited company buy-to-let mortgage is right for them.
IT Contractor Mortgages
An IT contractor day rate mortgage is a type of mortgage that is specifically designed for IT contractors who are paid on a daily rate or hourly basis. With this type of mortgage, lenders can consider the daily rate of pay, rather than the usual self-employed income, when calculating the amount that can be borrowed. This is because IT contractors typically work on short-term contracts and their income can fluctuate greatly, making it difficult to assess their affordability using traditional methods.
To qualify for an IT contractor day rate mortgage, the contractor will typically need to have a track record of contract work and a history of consistent income. They will also need to provide evidence of their current contract and projected future earnings. The mortgage will usually be assessed based on the contractor’s average daily rate over the past 12 months, rather than their current rate, to take into account any fluctuations in income. However, lender shave different criteria and can consider newer entries to the industry.
IT contractor day rate mortgages are a niche product and are offered by specialist mortgage lenders who understand the unique needs of contractors. They can be a good option for IT contractors who may struggle to secure a traditional mortgage due to their income structure.
Second Charge Mortgages
A second charge mortgage, also known as a second mortgage, is a type of loan that allows homeowners to borrow money against the equity they have built up in their property. This type of mortgage is separate from the homeowner’s primary mortgage and allows them to borrow additional funds without having to remortgage their property.
A second charge mortgage is secured against the borrower’s property, meaning the lender has the right to repossess the property if the borrower defaults on their payments. Because of this added security, second charge mortgages may have lower interest rates than other types of unsecured loans.
Second charge mortgages are often used for home improvements, debt consolidation, or other large expenses. They can also be used for investment purposes, such as funding a buy-to-let property. It’s important to note that the borrower is responsible for making repayments on both their primary mortgage and the second charge mortgage.
Equity Release Mortgages
An equity release mortgage, also known as a lifetime mortgage, is a type of mortgage product available specifically designed for homeowners who are 55 years or older. It allows homeowners to release some of the equity in their property as a lump sum or regular income, without having to sell their home or make any monthly repayments.
The amount that can be released depends on the age of the homeowner, the value of the property, and the amount of equity they have in it. The loan, including the interest accrued, is repaid when the homeowner dies or moves into long-term care, and the property is sold. The lender will then take their share of the proceeds from the sale, with any remaining funds going to the homeowner or their estate.
Equity release mortgages can be a useful way for retirees to access some of the equity tied up in their property to supplement their income or fund their retirement, but it’s important to understand the costs involved and the impact it may have on inheritance for loved ones. Therefore, it is important to seek independent financial advice before considering an equity release mortgage.
The Financial Conduct Authority does not regulate building surveyors.
Thameside Mortgage Ltd are not regulated by The Royal Institution of Chartered Surveyors, we do not have any involvement in the provision of this type of service / activity. We are not qualified surveyors and the information provided on this website is for informational purposes only. The information provided is not intended to be a substitute for professional advice, inspection, or survey.
It is important to seek professional advice and to undertake a proper survey/inspection before making decisions or taking actions related to a property.
What Our Clients Are Saying
Couldn't recommend Thameside Mortgages enough, both Andrew and Laura have and continue to be a huge support in the process for us. We have been kept up to date at all times, provided as much information as possible and have received helpful responses to any queries we have had. They have made a stressful process much easier and we couldn't have wished for a better service.
I genuinely can't thank Andrew and Laura enough for all of their hard graft through a very stressful process! The sleepless nights have been totally worth it!! I couldn't have done this with out your superb guidance. Professional, caring, excellent communication, explations to a solo first time buyer that doesn't always understand the jargon that comes with process. I was told by several people I didn't earn enough, needed a partner, better paid job to get on the property ladder. Andrew took this as a challenge and found me an excellent mortgage deal, twice!! I am so, so happy that I chose them to make this a lot easier. I genuinely can't recommend Thameside Mortgages enough. Forever grateful!
Jason was very knowledgable and calm during the whole process and always available to answer my questions. I would definitely use Thameside again.
I've used Andrew from Thameside Mortgages twice now, i'd highly recommend his service. The information provided was very in-depth and easy to understand. My most recent mortgage offer was about to complete, when Andrew called and had found a better rate and saved us more money which was a lovely surprise 🙂 Would use his service again!
I've been working with Andrew and his team for a few years now. After recently completing a re-mortgage with Thameside I thought I'd leave a quick review to help others looking for help with the mortgage and to show my appreciation to everyone at Thameside. Their customer service is fantastic. Each time the process is completely stress free. The team are knowledge and always willing to go above and beyond to help make the process go smoothly. They take the time to explain the products they offer in a way that is easy to understand. They are profession and personable at the same time. I especially like the person touches the team do, like sending a thank you card on completion. I would highly recommend the services they offer. Keep up the good work Thameside.
Having used a number of mortgage advisors in the past, I can say that Thameside were a breath of fresh air. We have an unusual situation and were told we couldn’t get what we needed from other advisors. Thameside were able to arrange a mortgage and kept us updated constantly and were available any time to discuss all the usual issues. Highly recommend to anyone looking for a mortgage.
Impeccable service from Andrew and his team @ Thameside Mortgages. Very helpful, thorough and professional service. What’s more, we were under time restraints due to the temporary reduced rates of stamp duty; Thameside exceeded our expectations and got the job done with the mortgage secured and plenty of time to spare; a pleasant experience all round. Thanks Thameside!
I really can’t recommend Thameside Mortgages enough. From start to finish, the process was very well explained and completely hassle free. They found me an amazing deal and their communication, responsiveness and support was second to none. A heartfelt thank you to Andrew, Laura and Lydia; keep up the brilliant work.
I could not recommend Thameside Mortgages More! Andrew is always fantastic to deal with, he is always extremely responsive, supportive and helpful! Thanks to the team at Thameside and Andrew for your constant support!
Andrew and his team were so helpful, quick and professional and once we moved into our new home they sent us the most amazing welcome gift. I can highly recommend them to everyone. A massive thank you for making our mortgage process for our first home so smooth and easy!
Thameside Mortgages have been fantastic. They helped me through the whole mortgage process and were totally supportive. I was not only trying to buy a house but also remortgage my old one at the same. I can t tell you how stressed I was but Andrew and Lydia were amazing and walked me through the whole process. They will always do their best to help you. Believe me you are in safe hands with them. Thanks Sharon
My partner and I have used Andrew and his team several times now and will continue to do so, or recommend him, wherever possible. Whether it’s a mortgage, buildings, contents or life insurance, Andrew and his team, without fail, go above and beyond in delivering an exceptional service and client experience from start to finish. Andrew and his team respond speedily by email and/or make themselves available to speak directly. Their insight is incredibly valuable and offer kindness and patience too at a time when decisions can be more challenging. Additionally, Andrew has offered suitable products where other advisers have been unable. Thank you Thameside - you are absolutely our ‘go to’ and your service is genuinely appreciated at a time when it is needed!
First class and professional service. The advice given on various mortgage products, terms and insurance options were excellent. Throughout the sale/purchase they were in constant contact with my solicitor and estate agent, and kept me up to date regularly. Would highly recommend.
I had a fantastic experience with Thameside Mortgages, Jason was extremely proactive throughout the entire process and was a pleasure to work with. He was very patient and knowledgeable which helped reassure me as a first time buyer, an absolute asset. All my questions were answered swiftly and he would constantly check in with me throughout what ended up being a long drawn out process. I highly recommend.
I was highly recommended Thameside Mortgages and they didn't disappoint! The process was stress free, professional and very efficient. Nothing was a problem. Everything was explained fully and no question was to much trouble to answer in a way that I could understand. I also took out insurances too which were highly competitive! Great company and service received.
Introduced to Mr Sheen in 2016 and using his services for me and my family since then. When I was looking for the second mortgage, I was unable to find him at his earlier employers, as he had meanwhile started Thameside Mortgages. I spent two days on internet, found him and contacted. I appreciate 7 respect his services, integrity & professionalism.
We’ve been using Andrew for over 10 years, the service, knowledge and expertise he provides is exceptional! From our first time mortgage to re-mortgage, Andrew has always obtained extremely competitive rates vs what you would find on the market and is extremely responsive throughout the process. We also have our life insurance policies with Andrew, which we have found to be incredibly competitive. All around a great team and I would highly recommend Thameside Mortgages to anyone.
Thameside Mortgages, Jason Senior Financial Adviser is the most proactive Adviser I have had the pleasure of working with. He helped me not only with the purchase of my Property 5 years ago but also with my Remortgage couple days ago, very versatile with a lot of knowledge and huge experience a really great, amazing person. My e-mail was answered frequently within a minute, he was quick on the document chase. Friendly professional, service, I definitely recommend it. And very decently. Thank you so much Jason.
Thameside were amazing! Made the process completely stress free and felt informed throughout. I’ll go with them every time.
Absolutely the best, most helpful and speedy broker I've ever worked with - Thameside sorted everything including finding the right mortgage and insurances for me, guiding me through the applications and keeping me posted throughout the process. Particular thanks for their endless patience with me dithering over every decision, but because of their honest and clear advice, I'm completely comfortable I've made the right choices. I really couldn't recommend these guys enough!
We used Thameside Mortgages for the purchase of our first home. We had both a professional and brilliant service from Andrew and his team. I would highly recommend Thameside Mortgages. They go above and beyond and guided us through the whole process. Thank you so much Andrew.
Andrew and his team did an amazing job on our mortgage and the surrounding process. We had our offer in principle within 24 hours of contacting them. The on boarding was seamless and laura kept us updated with progress from our solicitors throughout the wider conveyancing process which means we were always well informed. I would not hesitate in recommending them to anyone
Andrew, Laura and the Thameside team were fantastic and delivered a brilliant result for us. They were able to secure two competitive mortgages for our remortgage and new house purchase. These were secured in a matter of weeks and then Thameside guided us through a tricky exchange and completion process with minimal fuss and stress. Thank you Thameside for a providing a wonderful service and we’ll sure to be back again in the future!
Andrew and his team are great to work with! They are very knowledgeable and have been very helpful throughout the whole process!
Brilliant service from start to finish. Andrew and the team were friendly, knowledgeable and available at every step of the way during the remortgage process ensuring it went smoothly and were always available to help. Would thoroughly recommend.
Andrew and Laura at Thameside Mortgages were incredibly helpful in guiding me through the home buying process. They answered all of my questions and were in regular communication with me throughout. They were invaluable with also helping to communicate with my solicitor to ensure that my purchase went well. I can highly recommend them to anyone looking for a friendly, knowledgeable and professional advisor.
Can not fault the service offered by Thameside Mortgages. Our personal advisor Jason was understanding accommodating and incredibly knowledgeable. He understood exactly what we needed and was in constant communication throughout our process and the after sales care we are currently receiving is impeccable. Congratulations Thameside Mortgages you have made our dream of owning a home come true!
This is the second time I've instructed Andrew Sheen at Thameside Mortgages to find and secure the right deal for me. On both occasions I've had complete confidence in his ability to work with my best interests at heart. So professional and personable, I hope to always work with him when moving house or remortgaging. Not to mention, he's also a really top bloke. Thank you Andrew and team. Let's do it all again in 5 years time.
Andrew and Laura have been very helpful every time we have spoken to them. They have quickly processed our transactions and responded to any issues immediately. We highly recommend Thameside Mortgages and all the services they offer. Thank you for helping us through our recent propert purchase.
I had heard great things about Thameside Mortgages before we used them to buy our new home, and they certainly did not disappoint! Andrew and his team were friendly, thorough and efficient from start to finish, which made what initially felt like a daunting process completely stress free. The team went above and beyond on multiple occasions, including to resolve a couple of unforeseen issues that we encountered with our mortgage application, proving that we couldn’t have done it without them! I will definitely be using them again for any future house purchase / remortgage.