Types of mortgage loans in the UK explained

Getting a mortgage is often the biggest financial commitment people make, and the UK has numerous types of mortgage loans that can make buying a property more accessible.  

Mortgage choice is realistically defined by two characteristics: how you repay the capital and how the interest rate is structured. For repayments, you've got a standard repayment structure, interest-only, and part-and-part. The interest added can be fixed, variable/standard variable rate (SVR), tracker, discount, capped, or offset.

And around those mainstream structures, there is a massive specialist market, including buy-to-let, guarantor/family-assisted, joint borrower sole proprietor, Right to Buy, shared ownership, adverse-credit, self-employed, expat, bridging, and lifetime mortgages. All of this is bundled into literally thousands of mortgage deals.

You may find yourself overwhelmed by technical terms and industry jargon, so we've created an easy-to-digest, comprehensive guide to the types of mortgage loans in the UK.

What are the different types of mortgage loans?

There are several different types of mortgage loans in the UK that come in different shapes and sizes (mainly in terms of interest), but they're generally split into three categories: repayment mortgage, interest rate deals, and the specialist mortgage types.

Before we get into them, it's worth understanding some mortgage buzzwords. You'll hear and read the word capital a lot, and that's the initial money you borrow. So if you’re buying a £200,000 house and you put a 10% deposit down of £20,000, the capital you will borrow is £180,000.

The interest is the additional charge from the lender, usually your bank, added on to the money you owe (the capital).

By repayment method

A repayment mortgage is the most popular type of deal and the simplest to understand. It'll be a fixed-term mortgage, usually 25 or 30 years, and each monthly payment covers interest and some of the capital. The repayment schedule is designed so that your balance reaches zero by the end of the term.

A subcategory of the repayment method is an interest-only repayment deal. The decided monthly payment covers only the interest, meaning the capital must be repaid separately at the end of the term. This isn't really a common option, but you will see it commonly in later life or buy-to-let markets, and the eligibility requirements and term conditions are stricter for owner-occupiers. Barclays, for example, says applicants need at least £75,000 annual income.

There's also part and part, which is a combination of interest-only and repayment mortgages, with each repayment structure usually having a set period. The interest-only portion also still needs a separate exit plan.

The repayment method is the most accessible, with all mainstream high-street banks such as Barclays, HSBC, NatWest, and Lloyds offering them in the UK.

By interest rate deal

If you've talked to anyone who has bought a house, they'll have told you about the conundrum of deciding between a fixed and variable rate mortgage deal. Tracker, discount, and SVR interest also fall into the variable category.

You can fix your mortgage interest rate for one year up to 15 years. Once fixed, the interest rate stays set for those years. After the fixed term ends, you can either remortgage and fix the rate again, or you'll switch to the lender's SVR.

Variable interest rate deals usually refer to the lender's SVR, and it can change at any time. A tracker interest rate offer is a variable rate that tracks an external benchmark, usually Bank Rate plus a margin. With Bank Rate at 3.75%, tracker pricing has become more competitive again.

The reason so many people debate what to do is that if you fix at a specific interest rate and the wider standard variable rates fall, perhaps because of external factors like inflation rates dropping, you don't get the benefit. And early repayment charges can bite you. Still, fixing is the dominant consumer choice.

Moneyfacts said average new two-year fixes were 5.68% and five-year fixes 5.63% at the start of June 2026.

Other types of interest rate mortgage deals include:

• Discount: Interest is priced at a set discount to the lender’s SVR, commonly for two, three, or five years.

• Capped: A variable interest rate with a cap. The rate can still move, but not above a stated maximum during the capped period.

• Offset: This type of offer links the mortgage to savings, so interest is charged only on the net balance.

Specialist mortgage types

Specialist means the borrower, property, income, or title structure sits outside the standard owner-occupier case, and mortgages usually have more policy variation between lenders.

The specialist mortgage types you'll likely see are:

• Buy-to-let: You can get a mortgage for a property to rent it out, but you can't live in it.

• Guarantor or family-assisted: If you have a low credit score or you don't quite meet the eligibility requirements, you might be offered a guarantor mortgage deal. Another person, usually a family member, puts their name to support the loan by giving a guarantee, savings security, or income support.

• Shared ownership: You can buy a share of a property, so think of it as a partial mortgage and pay rent on the remainder of the value. You can eventually own the home by buying the remaining shares of the property in a process called 'staircasing.'

Which type of mortgage is right for you?

Now you get the picture that there are so many types of mortgage loans, and the right one for you is typically the one that fits your cash-flow resilience.

In the UK, the most common is a fixed-interest repayment mortgage, but there are so many options available if that method doesn't suit your unique financial circumstances. If you know you'll struggle to get a 'standard' mortgage option, you've got plenty of specialist mortgage types to explore that have slightly more flexible eligibility requirements.

Consider sitting down with a mortgage advisor before you do anything to talk through your options. They'll assess your financial status and credit history to give you an idea of the best, most long-term, affordable options for you.

How your credit file affects your mortgage options

Having a good credit score is important, but there’s no minimum credit score required for a mortgage, and lenders don't see your number anyway.

They see the data on your credit report instead, and then apply their own policy, affordability rules, and property criteria. 

Your most detailed credit report

The Checkmyfile report is especially useful before a mortgage application because it pulls together Experian, Equifax and TransUnion data. The three agencies don't always hold identical records or calculate their scores in the same way, so pulling the three together gives you the most complete view of your credit health.

And if you see something that doesn’t look right, our UK-based customer care team can help. Get started with a 7-day free trial, then it’s 14.99 a month – cancel online anytime.