What is a mortgage?

A mortgage is a loan taken out for the specific purpose of buying a home. You borrow money from your mortgage provider and pay it back over a pre-agreed term with interest included.

What is the difference between a mortgage and another loan?

The difference between a mortgage and most other types of loan is that the mortgage is secured against your home. This means that if you don’t keep up the repayments on your mortgage, we are legally entitled to repossess your home and sell it to recoup the money we have lent out to you.

When you apply for a mortgage, we carefully check your income and expenditure using an Affordability Assessment to make sure you can comfortably afford the repayments on the mortgage product you are applying for.

Types of mortgages we offer

At Progressive, we provide two main types of mortgages: Repayment and Interest-only.

Repayment Mortgages

  • Your monthly payments cover both interest and part of the capital borrowed.

  • Early on, most of your payment goes towards interest.

  • Over time, the capital portion increases until your mortgage is fully repaid by the end of the term.

Interest-only Mortgages (and Part Interest-only)

  • You pay only the interest each month on the interest-only amount.

  • The full capital must be repaid at the end of the term.

  • You’ll need a repayment plan in place, such as: A personal pension lump sum, A Stocks & Shares ISA, Proceeds from another property sale

Important: The loan amount is restricted to a percentage of the purchase price or property value. Please contact your local branch to discuss your options.

Standard Variable Rate (SVR)

Most people choose a Fixed or Variable special rate when taking out a mortgage. When that period ends, your mortgage automatically reverts to our Standard Variable Rate (SVR), sometimes called the ‘reversion rate’.

Our SVR can move up or down in response to market conditions. It does not track the Bank of England Base Rate, so changes may not align with what you hear in the news. If the SVR changes, we’ll always notify you in advance.

2197455438 Mixed Content 802 X 452

Fixed Rate

Your mortgage rate stays the same for an agreed term, usually 2, 3 or 5 years (other options may be available). After this period, it reverts to our Standard Variable Rate.

Pros of Fixed Rates 

  • Easier budgeting, as monthly repayments stay the same during the Fixed Rate period

Cons of Fixed Rates

  • You won’t benefit if our Standard Variable Rate falls

  • Early Repayment Charges apply if you repay a significant amount (typically more than 10%) or the full loan during the Fixed Rate period

2165154407 Mixed Content 802 X 452

How long can you have a mortgage for? 

Many borrowers will opt for a 25-year term, but you can choose to take your mortgage over anything from 6 years to 40 years!

There are some things to consider though:

  • A shorter term means you’ll repay your mortgage sooner and pay less interest. However, your monthly repayments will be higher so you’ll need to make sure you can afford them, especially if your mortgage rate was to rise.

  • A longer term means your monthly repayment will be lower but the total amount of interest you will repay over the full term will be higher so you will end up paying more overall.

You also need to be careful that the longer term doesn’t risk your mortgage running into your retirement when your income may fall significantly.

What are the costs involved?

We will carry out a valuation of the property you wish to purchase to make sure it provides us with adequate security against the mortgage you are applying for. 

We have a set scale of valuation fees available on our website, and in branch. Please visit our contact us section to find details of your nearest branch.

Please note: The valuation is for our purposes only and it is not intended to give you an indication of the condition of the house. We sometimes use an AVM (Automated Valuation Model) to give us an indication of the estimated value of your property. If we use an AVM, you will not receive a copy of a valuation report and we recommend you arrange to have an independent valuation carried out by a qualified surveyor, prior to purchasing a property. If you need further information about your home, you will need to instruct a surveyor - see Survey Fees below.

It’s wise to instruct a qualified Surveyor, who should ideally be registered with the Royal Institute of Chartered Surveyors (RICS) to undertake an independent survey of your home.  

They will be able to tell you about the condition of the property and if there are any structural issues you need to be aware of, especially if the house is older, so you know exactly what you’re buying. 

You will arrange to pay the surveyor directly for the survey report. Please ensure you obtain a quotation from the surveyor before instructing them. A little outlay now could save you a significant expense in the long run.

You’ll need either a Solicitor or a registered Conveyancer to look after all the legal work involved with applying for a mortgage. If you don’t already have a Solicitor, we can help you find one and give you an idea of what they charge for the services they provide.

Your Solicitor will work on your behalf to represent your interests as well as preparing and checking all the legal paperwork. They will also carry out searches to ensure no local factors will impact your house, such as other nearby building work or plans to build new roads. 

Stamp duty is another of the costs and fees you need to consider when saving up for your home. 

Stamp duty is a Government tax which applies depending on the purchase price of your property. Find out if you would have to pay Stamp Duty on the property you’re interested in buying at www.gov.uk (type ‘stamp duty’ into the search box). 

Insurances; the right cover, the right price

This provides cover against damage to the structure of your home from incidents such as flooding, fire, subsidence or a major accident like an explosion. You need to ensure there is sufficient insurance in place to cover the complete rebuilding of your home. The rebuild cost can vary considerably from the purchase price and the valuer will confirm the rebuild cost when carrying out the valuation. It will be a condition of your mortgage that you have buildings insurance in place for your property.

Dependent upon the level of cover you choose, you can protect everything within your home and garden, such as all your personal possessions. There are many different levels of cover available, and you usually have the option to insure some items such as bicycles, cameras and jewellery when you're away from home.

Most insurers will give you the option to take out a combined Buildings & Contents policy, which is generally more cost-effective.

The Society can refer your details to AXA insurance dac who have branches across Northern Ireland. AXA can provide you with a non-obligation quotation for the cover you require. Please contact one of our branches for more information.

Put the right cover in place to help protect your happy place. 

How would your loved ones manage if the worst happened to you?

Life cover provides insurance protection should you pass away during the term of your mortgage and can be arranged so that it pays out the outstanding balance on your mortgage. You can also arrange cover against critical illness and loss of income cover. 

The Society is unable to offer any advice on the suitability of any protection or investment products. For Protection Cover, we may refer you to an appointed representative of Mortgage Advice Bureau Limited and Mortgage Advice Bureau (Derby) Limited, who are authorised and regulated by the Financial Conduct Authority. Please speak to a member of staff for more information.  

In exceptional circumstances, there may be additional fees associated with your mortgage application. For example, you may need a specialist survey carried out such as a specialist tree survey, or a damp and timber report.

No two properties or mortgage applications are the same, so we’ll walk you through each step that’s relevant for you.

What should I do if I have difficulty repaying my mortgage?

The first and most important thing to do is to tell us. If you are having financial difficulties, which may cause you to struggle with your monthly mortgage repayments, we will do everything we can to help you manage your repayments and avoid putting your home at risk. Simply contacting us to discuss your mortgage will not impact your credit file.

We may be able to restructure monthly repayments for a short period to help you get back on your feet. See our section on  Financial Difficulties.

Please don’t ignore the problem and hope it goes away.

If you need help, talk to us today on 02890 821853.