Mortgages FAQs

Below you’ll find the answers to some of our most popular questions about mortgages. We cut through the jargon and explain things simply.

What is a mortgage?

A mortgage is a secured loan used to buy a property.

We offer owner-occupied mortgages, which means you live in the property you’re buying, and buy to let mortgages, when you buy a property to rent out to someone else.

What is the difference between a fixed rate and variable rate mortgage?

A fixed rate mortgage means your monthly payments and interest rate will stay the same during your agreed product term, which is usually for 2 or 5 years.  After your fixed term ends, your mortgage will move to the lender’s variable rate.

A variable rate mortgage means your interest rate can change at any time and will move in line with market rates, so your payments could go up or down depending on market conditions.

What is the difference between an interest only and a repayment mortgage?

With a repayment mortgage your monthly payments will pay the interest and also go towards paying off the amount you’ve borrowed. Your mortgage balance will gradually reduce and if you make all the agreed monthly payments, you’ll repay your mortgage in full at the end of the term.

With an interest only mortgage your monthly payments only pay off the interest on the amount you borrow. You’ll still owe the amount you originally borrowed at the end of your term, so you’ll need to have suitable plans in place to pay the outstanding amount at the end. Please contact your broker for more information on suitable ways to repay.

What does LTV mean?

LTV or loan-to-value is the value of the mortgage compared to the value of the property expressed as a percentage. For example, if you have a 5% deposit you’ll need a 95% LTV mortgage.

What is APRC?

The APRC is the Annual Percentage Rate of Charge. This shows you the total cost of your mortgage expressed as an annual percentage. This includes both the initial interest rate and the lenders variable rate and any fees, such as broker costs. It is calculated as if you kept your mortgage the same for the whole term without changing it.

What is a decision in principle?

A decision in principle is a document we’ll provide confirming the amount you’ll be able to borrow subject to a full assessment when you apply. The amount may change once we review your application in full.

What is the difference between leasehold and freehold?

Freehold: you own the property and the land it stands on, for an unlimited period.

Leasehold: you own the property but not the land it’s built on – that’s owned by the freeholder. Ownership of your property is also for a set period, which can be a number of years, decades or centuries, depending on the length of your lease. If your lease expires, ownership of your property technically passes to the freeholder.

A mortgage with Aldermore

Can I take my Aldermore mortgage with me if I am moving house?

Our mortgages aren’t portable. However, if you are eligible to take out a mortgage with us on your new home then we’ll refund your early repayment fees as long as the new mortgage is for the same amount or more and you complete within 6 months of the repayment date of your old mortgage.

Can I get a mortgage if I’m not from the UK?

If you’re a UK or EU national with settled status and have been continuously resident in the UK for the last 2 years then you can apply for a mortgage with us.

If you’re a non-UK national, then we’ll consider your application as long as you’ve been living in the UK for the last 2 years and also have a non-conditional and permanent right to reside.

We don’t consider applications from ex-pats and those with diplomatic immunity.

What happens if I can’t pay my mortgage?

If you’re worried about making your mortgage payments, we’ll work with you to find a solution.

If you need to speak to us you can email mortgage.support@aldermore.co.uk and we’ll call you back or you can call us on 01733 821388. You can find more information on our money worries page, or if you’d like independent advice you can contact:

Subject to status. Credit will be secured on your home. Your home may be repossessed if you do not keep up repayments.