Mortgages

11.1.30.L8 Updated on:

Taking out a mortgage

You should get independent advice from an expert or from your own bank when taking out a mortgage.

Jersey Lending

There are many types of mortgage and you need to take advice on which one is right for you. Much will depend on your financial circumstances and the kind of work you do. There are tracker, discount and fixed rate types available and in some instances you might be able to borrow the whole of the purchase price. This is called a 100% mortgage. In general though the higher the deposit you have, the better the repayment rate will be.

Base rates

This is the interest rate set by the Bank of England, on which the mortgage rates are set. For many years it has been very low which makes it good for anyone borrowing, but very bad for savers. You can find out what the current interest rates are by checking with the different companies or banks who offer mortgages. You must check around as some may seem lower but they charge a fee to set the mortgage up. Always ask about any extra costs.

There are mixed opinions on when base rate will start to rise. Any rate increases will be gradual and as a result any borrowers who are on a tracker or discount mortgage should be somewhat protected.  If you have a tracker mortgage and the base rate rises to an unaffordable level, speak to your mortgage provider or broker as they may be able to switch your mortgage.  There will be an early repayment fee but this may be less than the repayment increases for the remaining term of the mortgage.  As with any borrowing however, your home or property could be at risk if you do not keep up the repayments.

Income Tax Relief

See the Government of Jersey website