Mortgage Rates
The annual percentage rate, or APR, on your mortgage will determine how much you ultimately pay for your home. But you must also pay close attention to the kind of interest rate you're paying. With a fixed-rate mortgage, your monthly mortgage payment and interest rate will remain consistent. Variable-rate mortgages fluctuate over time, typically rising when mortgage base rates go up across the board and falling when base rates go down. In England, base rates are determined by the Bank of England.
A mortgage company will refer to the term "loan to value" (LTV) when discussing the offer with you. This refers to the amount they are prepared to lend to you, as a percentage of the value of the property. In general terms, the higher the percentage, the higher the interest rate that you will have to pay. The difference is money that you have to provide—from savings, for example—and this is often called a deposit. (This should not be confused with the deposit that a buyer has to pay on exchange of contracts.) Put another way: The larger the deposit you can provide, the better deal you will get.
