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 term, which is usually for 2 or 5 years.  After your fixed term ends, your mortgage will move to the lenders standard variable rate.

A variable rate mortgage means your payments 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 you pay off both the interest and capital with each monthly payment. This means at the end of the term your mortgage will be repaid.

With an interest only mortgage you only pay the interest each month and the amount of capital owed will not reduce. This means you need to have suitable plans in place to pay off the mortgage at the end of the term. You could use sale of the mortgaged property, cash, stocks and shares, an endowment policy or pension.

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 will need a 95% LTV mortgage.

What is APRC?

The APRC is the Annual Percentage Rate of Charge and is the overall cost of the mortgage including interest and fees. It gives an effective annual interest rate for the whole term of the mortgage and is on the basis that the rates do not change even if the rate is described as variable.

What is a decision in principle?

A decision in principle is a document we will provide confirming that you will be able to borrow a certain amount subject to a full assessment when you apply. The amount may change once a full review is carried out.

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 on which it is built – that is 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 home?

Our mortgages are not portable. However, if you want to take out a mortgage with us on your new home then early repayment fees will be refunded as long as the new mortgage is for the same amount or more and you complete within 6 months of the repayment date of the old mortgage.

Can I get a mortgage on an ex-local authority property (XLA)?

We do lend on ex-Local Authority or ex-council properties, but they may be subject to some additional criteria. To find out more give one of our mortgage advisers a call on 0333 321 1000, and they will be able to advise you depending on your individual circumstances.

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 will 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.