Getting a Mortgage: What You Need to Know
A mortgage is the biggest financial commitment most people will ever make. Understanding the basics before you start looking at properties will save you time, stress, and potentially thousands of pounds.
Types of Mortgage
Fixed rate
Your interest rate stays the same for a set period — usually 2, 3, or 5 years. Monthly payments are predictable, which makes budgeting easier. When the fix ends, you move to the lender’s standard variable rate (SVR), which is almost always higher. Most people remortgage before that happens.
Variable rate (tracker)
Tracks the Bank of England base rate plus a set margin. When the base rate goes down, so does your payment. When it goes up, so does your payment. Can be cheaper than a fix in a falling-rate environment, but carries more risk.
Standard variable rate (SVR)
The lender’s default rate. It can change at any time and is usually the most expensive option. Avoid staying on it longer than necessary.
Offset
Your savings are set against your mortgage balance, so you only pay interest on the difference. Useful if you have significant cash savings but want to keep them accessible.
How Much Can You Borrow?
Most lenders will offer 4 to 4.5 times your annual income. Some specialist lenders go up to 5.5 times for high earners or certain professions (doctors, solicitors, accountants). Joint applicants combine their incomes. The lender will also stress- test your affordability — checking you could still make payments if rates rose by 3 %.
Your credit score, existing debts (credit cards, car finance, student loans), and monthly living costs all affect the final figure. Reduce outstanding debt before applying to maximise your borrowing power.
The Deposit
You typically need at least 5 % of the property price, but a larger deposit means better rates. The sweet spots are 10 %, 15 %, 25 %, and 40 % — each tier unlocks cheaper products. A 10 % deposit on a £300,000 property is £30,000. First-time buyers may qualify for a Lifetime ISA bonus (25 % on savings up to £4,000 per year) or Help to Buy equity loan (in areas where it is still available).
Fees to Budget For
| Fee | Typical cost | Notes |
|---|---|---|
| Arrangement fee | £0 – £2,000 | Can be added to the mortgage (but you will pay interest on it) |
| Valuation | £0 – £500 | Many lenders offer free valuations |
| Survey | £300 – £1,500 | Homebuyer report or full structural |
| Solicitor / conveyancer | £800 – £2,000 | Legal work, searches, Land Registry |
| Stamp Duty | Varies | See our stamp duty guide |
| Broker fee | £0 – £500 | Some brokers are fee-free (paid by lender) |
The Process: Step by Step
- Get a Decision in Principle (DIP) — a soft credit check that confirms roughly how much a lender would offer you. Takes minutes online.
- Find a property and make an offer — once accepted, instruct a solicitor and submit a full mortgage application.
- Valuation and survey — the lender values the property to confirm it is worth what you are paying. You should also commission your own survey to check for structural issues.
- Mortgage offer — if everything checks out, the lender issues a formal offer (usually valid for 6 months).
- Legal work — your solicitor conducts searches, reviews the contract, and handles the transfer of ownership.
- Exchange contracts — both sides are now legally committed. You pay your deposit (usually 10 % of the purchase price as an exchange deposit).
- Completion — the remaining funds are transferred, you get the keys, and the property is yours.
The whole process typically takes 8 – 12 weeks from offer acceptance to completion.
Want to see what your monthly repayments would be? Try our free Mortgage Calculator on CalcPad.
This guide is for general information only. Mortgage products change frequently — always get personalised advice from a qualified mortgage broker or independent financial adviser.