Police Mortgage Information


There are two payment methods to consider when deciding on what type of mortgage is most suitable to your needs:


Repayment Mortgages


Each month, your mortgage payments go towards reducing the amount you owe as well as paying the interest .
So each month you are gradually paying off  your mortgage.

The pros: You can see your loan reducing and is more simple.

The cons: At first your payments will be mainly interest, so if you want to repay the mortgage or move house in the early years, you’ll find that the amount you owe won’t have reduced by very much.


Interest Only Mortgages


Your monthly payment only pays the interest on your loan, therefore you are not reducing the money you borrowed. You will need to arrange some other way to repay the original amount at the end of the term; for example, using an investment or savings plan.
However, you will need to keep checking that your investment or savings plan grows enough, so that at the end of the term you’ll have enough to pay off the outstanding mortgage amount. If it doesn’t grow as planned, you could end up with a shortfall, and may have to sell the house to repay the loan

The pros: As you are only paying off the interest, and not the amount borrowed, your monthly payments will be lower than a repayment mortgage.

The cons: Your mortgage is not reducing and during the life of the mortgage, you’ll need to check your investment or savings plan is growing enough to repay your mortgage at the end of the term. If you can’t repay it at the end of the term you could lose your home, as you may have to sell it.



There are various rate options that are available when deciding on your mortgage.
The following outlines the most common options:

Common Types of interest rate deals

How does it work

Early repayment charges

What does it mean for you?

Standard variable rate
Your payments move up or down at the lender's discretion. The lender may not reduce, or may delay reducing their variable rate even if the Bank of England rate goes down.
Not usually.
  • You can leave your lender without any penalties or problems.
  • You can overpay without charge
  • If the lender decides to increase the rate your monthly payments will increase.
  • It may be more expensive compared to other deals.
  • The lender may delay reducing, their variable rate even if the Bank of England rate goes down.
Tracker rate
A variable rate loan with an interest rate that's normally a set amount above or below the Bank of England base rate. It tracks (moves up or down with) that rate
Sometimes during any special deal period and maybe even after the period too.
  • It could pay to go for a tracker if you can afford to pay more if interest rates went up, in exchange monthly payments reduce when they go down.
  • Not a good choice if your like to know you monthly outgoings and can’t afford higher monthly payments.
Discounted rate
Your monthly payments can go up or down, but you get a discount on the lender's standard variable rate for a set period.
During the special deal period: normally always. They can apply even after the end of the special deal period as well.
  • You must be sure you can afford the payments when the discount ends.
  • The lender may not reduce, or may delay reducing their variable rate even if the Bank of England rate goes down.
Fixed interest rate
Your payments are set at for an agreed period. At the end of that period, they'll usually switch you to the standard variable rate.
During the special deal period: yes, normally always, but subject to a maximum amount per year.
  • Your payments will remain constant for that period, even if interest rates go up.
  • This gives you the security of knowing that you can afford your payments and will make it easier to budget.