Disclaimer: Our website and publications aim to give you general information to help you make financial decisions. It is not advice, nor can it take account of your own particular circumstances. For advice with a view to making decisions about your own circumstances you should consult a financial or other professional adviser.

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How mortgages work

  • You take out a loan based on how much you can afford and the value of the property, for a length of time agreed between you and the lender.
  • You are charged interest on the loan, usually based on the Bank of England base rate, which is reviewed monthly.
  • You pay the mortgage back in one of two ways, repayment or interest-only – see Types of mortgage.
  • You can choose different deals for your interest rate, such as fixed or discounted – see Types of interest rate deals.
  • If you've had financial problems in the past and are finding it difficult to get a mortgage, the Council of Mortgage Lenders (CML) has a leaflet that may help. See Adverse credit mortgages in Get more help.