A mortgage is a loan secured against a property, used to buy a home or remortgage an existing one. Because the loan is secured against your home, missing payments can ultimately put your home at risk — which is why lenders assess affordability carefully before approving one.
Fixed vs. variable rates
A fixed-rate mortgage keeps your interest rate the same for an agreed period (commonly two, five, or ten years), giving predictable monthly payments during that time. A variable-rate mortgage — including trackers, which follow the Bank of England base rate plus a margin, and standard variable rates set by the lender — can go up or down, meaning payments aren't fixed. Many buyers choose a fixed rate for the certainty, especially for their first mortgage.
Loan to Value (LTV)
LTV is the mortgage amount as a percentage of the property's value — a 90% LTV mortgage means you're borrowing 90% and putting down a 10% deposit. Generally, a lower LTV (bigger deposit) unlocks better interest rates, since the lender is taking on comparatively less risk.
What lenders assess
Affordability checks look at your income, existing debts and regular outgoings, credit history, and — since 2014 — a stress test of whether you could still afford payments if interest rates rose. Self-employed applicants are typically asked for more evidence (often two to three years of accounts or tax returns) than employed applicants with a straightforward payslip history.
Fees beyond the interest rate
Many mortgage deals come with an arrangement fee, and there can be valuation fees, legal (conveyancing) fees, and potentially early repayment charges if you switch deals before the fixed or discount period ends. Comparing the overall cost, not just the headline interest rate, gives a fairer picture of which deal is actually cheaper.