Mortgage guide

Whether you’re saving to buy your first home, moving house or remortgaging your existing property, mortgages can be complicated and time-consuming to arrange. We like to keep things as straightforward as we can though, offering a simple range of great products and clear advice at every step of the journey.* Our mortgage guide below may help, and our trained advisors are available to give advice, in branch or over the phone.

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

*If you apply for a mortgage online you will not receive advice from Leeds Building Society. You will need to make your own choice about which mortgage is suitable for you and we will not assess the suitability of that mortgage to your needs and circumstances. You will not benefit from the protections offered by an advised service. This is called an execution only transaction. If you would like to receive advice from us please call into one of our branches (find a branch) or contact us on 08450 50 50 62.

Understanding mortgages

If you’re not sure what type of mortgage is best for you, it can help to think about the following:

Deposit

This is the one instance when bigger really does mean better. In general, the more deposit you have, the greater the range of products that will be available.

Fixed rate Vs Variable rate

The decision of whether to take out a variable or fixed rate mortgage is really important, and what’s right for one person may not suit the next. There are some key differences and some things to consider:

Fixed Rate mortgages

These are great for budgeting and ideal if you like to know what your payments will be each and every month. Your rate will be fixed at an agreed rate for a set period of time - regardless of what’s happening to the economy or the Bank of England’s base rate. The benefits are that if the base rate goes up, your payments will stay the same, meaning you know exactly what you’ll be paying each month. However, it does mean that if interest rates fall below the fixed rate that you agreed to with your mortgage provider, you could end up paying more than other people. You will also need to consider that some fixed rate mortgages include early repayment charges. At the end of your fixed rate period, your mortgage will usually be transferred automatically to the Society’s Standard Variable Rate (SVR).

Choose a fixed rate if:

  • you want security in your payments
  • you don’t want to risk payments going up
  • you understand you may end up paying more if interest rates fall

Variable rate mortgages

A variable rate mortgage means that the interest rate you pay will be the Society’s SVR. We calculate discounts on our other products against the Society’s SVR. If you take out a fixed, tracker or discount mortgage with us, when the deal ends you will usually be transferred automatically to our SVR unless otherwise stated in the product details.

Tracker Rate mortgages

These mortgages mean that your payments may vary month to month. The rate of interest that you pay tracks the Bank of England’s base rate at a set margin (for example 1.89%) above or below it. This means that in months when the base rate falls, your payments will too. This could give you the chance to overpay and get ahead on your mortgage (subject to the product’s terms and conditions). However, it does mean that if the base rate goes up, your payments will go up too, so you should have some money put aside for those times.

Choose a tracker rate if:

  • you have some money put aside to cover any increases in your payments
  • you’re happy to take the risk on your payments going up

Interest rates explained

Interest is the amount you pay for borrowing your mortgage capital, and it will vary from product to product. For fixed rate mortgages, as the name suggests, the interest rate you pay is fixed for a set period of time. After this, your mortgage will usually revert to our SVR. Interest rates for tracker mortgages track the Bank of England Base Rate by an agreed amount, for a set time period.

Fees and charges

All mortgages are subject to arrangement fees and charges and it’s important to budget for these early on. We like to be fair, clear and transparent about the fees we charge, so we always list these separately – don’t forget to check out the terms of each product to see what other fees and charges are payable. Fees may include booking fees, and valuation charges. There will normally be a product arrangement fee payable too. Also, don’t forget to check whether your mortgage is subject to any Early Repayment Fee and/or a redemption fee, in case you plan to pay yours off early.

Keep an eye out for our special discount mortgages which offer discounted fees, and free valuations,to help keep the costs of buying your home as low as possible.