FAQ

Your monthly repayment depends on how much you borrow, the interest rate, and the term (the number of years you repay over). A larger loan or a higher rate pushes the payment up; a longer term lowers the monthly figure but increases the total interest you pay over the life of the loan.

Repayments are usually calculated on a capital-and-interest basis: each month you pay interest on the outstanding balance and chip away at the loan itself. The split shifts over time — more interest early on, more capital later.

When a fixed deal ends you usually move to a new rate — often the lender’s standard variable rate, or a new fixed or tracker product if you remortgage. Even a one or two percentage point change can add a large amount to the monthly payment.

The impact is bigger on larger loans and earlier in the term, when most of the balance is still outstanding. It is worth modelling a higher rate before your fix ends so you know what headroom you need in your budget.

A longer term spreads the loan over more months, so each payment is smaller — but you pay interest for longer, which raises the total cost. A shorter term does the opposite: higher monthly payments, less interest overall.

There is no single right answer: it depends on what you can afford month to month and how much total interest you are willing to pay. Many borrowers choose the longest term the lender offers and overpay when they can, but that only works if you actually make the overpayments.

Stamp duty is charged in slices: each portion of the price above a threshold is taxed at a higher rate. In England and Northern Ireland this is Stamp Duty Land Tax (SDLT). The bands that apply from 1 April 2025 are published on GOV.UK.

You pay nothing on the slice below the first threshold, then progressively higher rates on the amounts above. The total is the sum of tax on each slice — not one flat percentage of the whole price.

In England and Northern Ireland, first-time buyers get relief: no SDLT on the portion up to a set threshold, and a reduced rate on the slice above that, up to a price cap. Above the cap, standard residential rates apply to the full price.

Scotland and Wales have their own first-time buyer reliefs under LBTT and LTT. Eligibility usually requires that you have never owned a residential property anywhere in the world, though the exact rules differ by nation.

Yes. Scotland charges Land and Buildings Transaction Tax (LBTT) and Wales charges Land Transaction Tax (LTT). Each has its own bands, thresholds, and surcharges instead of SDLT.

Second homes and buy-to-let purchases attract an additional-property surcharge in all three nations, though the percentage and how it is applied differ. Always use the rules for the nation where the property sits.

Buying an additional property — a second home or a buy-to-let — usually adds a surcharge on top of the standard residential rates in England, Scotland, and Wales. It applies even if the property will not be your main residence.

The surcharge can substantially increase the upfront tax bill. It is charged on top of the normal banded rates, not instead of them. Main-home replacements can sometimes qualify for a refund if you sell your previous main home within a set period — check the rules for your nation.

Most lenders look for at least a 5% to 10% deposit of the purchase price, though the best rates often require 15% or more. A larger deposit lowers your loan-to-value (LTV) ratio — the loan as a percentage of the property value.

Lower LTV bands can unlock cheaper interest rates and give you more lender choice. The deposit also reduces the amount you borrow outright, which lowers your monthly repayment even before any rate benefit.

Yes, for two reasons. First, you borrow less, so the capital-and-interest payment is smaller. Second, a lower LTV can qualify you for a cheaper interest rate, which reduces both the monthly payment and the total interest over the term.

The trade-off is tying up more cash upfront. That money is no longer available for furnishing, an emergency fund, or other goals — so the right deposit size balances monthly affordability with keeping a sensible cash buffer.

Overpaying reduces the balance that interest is charged on, so it can save thousands in interest and shorten your term — or, on some deals, lower your future monthly payments instead.

Most lenders allow some overpayment each year without an early repayment charge, often around 10% of the outstanding balance on fixed rates. Check your mortgage offer: exceeding the allowance can trigger fees.

The mortgage payment is only part of the picture. Owning a home also means council tax, buildings insurance, maintenance, and any service charge on flats. One-off buying costs — conveyancing, searches, a survey, and mortgage fees — add to the upfront bill.

Running costs vary by property and area. Council tax depends on the band; maintenance is often quoted as a percentage of the home’s value each year. Budgeting for these alongside the mortgage gives a more realistic monthly figure than the repayment alone.

Each repayment chips away at the loan balance, so your equity — the share of the home you own outright — grows over the term. If house prices rise, your equity grows faster; if they fall, it can shrink even as you repay the mortgage.

Early in the term, most of each payment goes to interest, so the balance falls slowly. Later, more goes to capital. Your equity also includes any change in the property’s market value, not just what you have repaid.