Frequently Asked Questions

A mortgage is a loan used to buy a property. The property acts as security for the loan, meaning the lender can repossess it if you fail to keep up with repayments. Most mortgages run for 25 to 35 years, with monthly payments covering the interest and gradually repaying the capital. You can explore what your payments might look like using our mortgage calculator.

Most lenders will offer between 4 and 4.5 times your annual income, though some may stretch to 5 or even 6 times in certain circumstances. The exact amount depends on your income, outgoings, credit history, and the lender's own criteria. Our affordability calculator can give you a quick estimate of what you might be able to borrow.

From initial application to receiving a formal mortgage offer, the process typically takes 2 to 6 weeks. The full process from application to completion (when you get the keys) usually takes 8 to 12 weeks for a purchase. Remortgages can be faster as there is no chain involved. Having your documents ready and responding quickly to requests from your broker or solicitor can help speed things up.

A fixed rate mortgage locks your interest rate for a set period, usually 2 or 5 years, so your monthly payments stay the same regardless of what happens to the Bank of England base rate. A variable rate mortgage can go up or down. Tracker mortgages follow the base rate directly, while discount rates are set below the lender's standard variable rate. Fixed rates offer certainty; variable rates can sometimes be cheaper but carry more risk.

You will typically need proof of identity (passport or driving licence), proof of address (utility bill or bank statement), your last 3 months' payslips, your last 3 months' bank statements, your latest P60 or tax return, and proof of your deposit. Self-employed applicants usually need 2 to 3 years of accounts or SA302 tax calculations. We will tell you exactly what is needed when you start your application.

The minimum deposit for most mortgages is 5% of the property price. So for a property costing £200,000, you would need at least £10,000. However, putting down a larger deposit (10%, 15%, or 20%) gives you access to better interest rates and lower monthly payments. Some lenders also offer guarantor mortgages or family-assist products if you have a smaller deposit. See our first-time buyer mortgages page for more details.

Yes. The main schemes currently available include Shared Ownership (buy a share of a property and pay rent on the rest), the Lifetime ISA (government adds 25% bonus to your savings up to £1,000 per year), and the First Homes scheme (offers selected new-build homes at a discount of at least 30%). The Help to Buy equity loan scheme closed to new applicants in 2023, but other options remain. We can advise you on which schemes you may be eligible for.

First-time buyers pay no Stamp Duty on the first £300,000 of a property priced up to £500,000. On properties between £300,001 and £500,000, you pay 5% on the portion above £300,000. If the property costs more than £500,000, you pay standard rates with no first-time buyer relief. Use our stamp duty calculator to work out exactly what you would pay.

An Agreement in Principle (AIP), also called a Decision in Principle or mortgage in principle, is a statement from a lender confirming they would, in principle, lend you a certain amount based on a basic check of your finances. It is not a guarantee, but it shows estate agents and sellers that you are a serious buyer. We strongly recommend getting an AIP before you start viewing properties.

The best first step is to speak with a mortgage broker to understand how much you can borrow and what your monthly payments might look like. From there, you should get an Agreement in Principle, start saving for your deposit and associated costs (solicitor fees, surveys, etc.), and begin viewing properties within your budget. Read our complete first-time buyer guide or get in touch to take the first step.

The best time to start looking at remortgage options is around 3 to 6 months before your current deal ends. Most fixed or tracker deals last 2 to 5 years, and when they expire you will be moved to your lender's standard variable rate (SVR), which is almost always more expensive. You can also remortgage to release equity, consolidate debts, or fund home improvements. Visit our remortgages page for more information.

There can be several costs involved. Your current lender may charge an early repayment charge (ERC) if you leave before your deal ends. Your new lender may charge an arrangement fee, though many remortgage deals come with free legal work and no valuation fees. There may also be a small broker fee. We will always give you a clear breakdown of all costs so you can see whether switching makes financial sense.

A remortgage means moving your mortgage to a different lender. A product transfer means switching to a new deal with your existing lender. Product transfers are usually quicker and simpler, with less paperwork. However, they limit you to only your current lender's products, which may not be the best available. We can compare both options for you to make sure you get the best deal.

Yes. If your property has increased in value or you have paid down a significant portion of your mortgage, you may be able to borrow more when you remortgage and receive the difference as cash. This is commonly used to fund home improvements, help family members with deposits, or consolidate other debts. You will need to pass affordability checks for the higher loan amount.

Yes, but you may need to pay an early repayment charge (ERC) to your current lender. ERCs are typically a percentage of the outstanding balance and decrease as you get closer to the end of your deal period. Sometimes the savings from switching to a better rate outweigh the ERC, but it is important to do the maths. We can calculate this for you and advise whether it makes sense to switch early or wait. Try our remortgage calculator for a quick comparison.

Buy-to-let mortgages are designed for properties you intend to rent out. They work differently from residential mortgages: you typically need a larger deposit (usually 25%), affordability is assessed mainly on the expected rental income rather than your personal salary, and interest rates are usually slightly higher. Most buy-to-let mortgages are interest-only, meaning you only pay the interest each month and repay the capital when you sell the property. See our buy-to-let mortgages page for full details.

Most lenders require the expected rental income to cover at least 125% to 145% of the monthly mortgage payment, depending on your tax status and whether you are borrowing personally or through a limited company. For example, if the mortgage payment is £800 per month, the lender may require a rental income of at least £1,000 to £1,160. A local letting agent can provide a rental valuation to support your application.

Buying through a limited company (known as an SPV or Special Purpose Vehicle) has become increasingly popular due to tax changes. Since April 2020, individual landlords can no longer deduct mortgage interest from rental income for tax purposes, whereas limited companies still can. However, there are additional costs such as corporation tax, accountancy fees, and potentially higher mortgage rates. We can explain the pros and cons based on your specific situation.

Rental income is added to your other income and taxed at your marginal rate (20%, 40%, or 45%). You can deduct allowable expenses such as letting agent fees, maintenance costs, and insurance. Individual landlords receive a 20% tax credit on mortgage interest rather than a full deduction. If you own through a limited company, the rules are different. We always recommend speaking to a qualified tax adviser about your personal circumstances.

Some lenders do offer buy-to-let mortgages to first-time buyers, though the options are more limited. You may need a larger deposit (often 25% or more) and the lender will assess the deal more carefully. Not all lenders accept first-time buyer landlords, so working with a broker who knows which lenders will consider your application is especially important. Read our buy-to-let mortgage guide for more details.

Absolutely. Self-employed people can get mortgages just like anyone else, though the application process requires more documentation. Lenders want to see that your income is stable and sufficient. With access to over 90 lenders, including many who are more flexible with self-employed applicants, we can find the right deal for your situation. Visit our self-employed mortgages page to learn more.

Most lenders require at least 2 years of accounts, SA302 tax calculations, or tax year overviews. However, some lenders will consider applications with just 1 year of accounts, particularly if you were previously employed in the same field. The more evidence of stable or growing income you can provide, the better your options will be.

For sole traders, lenders typically use your net profit figure from your tax returns. For limited company directors, most lenders look at salary plus dividends, though some will consider retained profits within the company as well. If your income has varied year to year, different lenders take different approaches: some average the last 2 or 3 years, some use the latest year, and some use the lower figure. A broker can match you to the lender whose calculation works best for you.

Yes. Several lenders now assess contractor income based on your day rate rather than your tax returns, which often results in a higher borrowing amount. You typically need at least 12 months of contracting history, a current contract, and evidence of contract renewals. This approach works well for IT contractors, engineers, healthcare professionals, and other skilled contractors. Our self-employed mortgage calculator can give you an idea of what you might borrow.

Being a company director does not prevent you from getting a mortgage, but lenders assess your income differently. Most lenders consider your salary plus dividends as your income. However, if you retain profits in your company rather than drawing them as dividends, some lenders will consider those retained profits too, which can significantly increase how much you can borrow. We know exactly which lenders offer the best treatment for directors. Read our self-employed mortgage guide for a deeper dive.

Our initial consultation is completely free and comes with no obligation. If you decide to proceed, our broker fee is only payable on successful completion of your mortgage. We will always confirm our fee upfront before you commit to anything, so there are no surprises.

We receive a commission (called a procuration fee) from the lender when your mortgage completes. This does not affect the rate you are offered or cost you anything extra. We may also charge a broker fee, which will always be disclosed upfront. We are required by the FCA to act in your best interests, and we will always recommend the most suitable mortgage for your circumstances regardless of the commission we receive.

Yes. Option Finance Ltd is an appointed representative of Finance Advice Group Ltd, which is authorised and regulated by the Financial Conduct Authority (FCA). Our FCA reference number is 624517. You can verify our registration on the FCA Register. This means we are legally required to give suitable advice, act honestly, and treat our customers fairly.

We are based in Derby but work with clients across the whole of England and Wales. Most of our process is handled over the phone, by email, and through video calls, so your location is not a barrier. Whether you are in Derby, Nottingham, London, or anywhere else, we can help you find the right mortgage.

The easiest way to get started is to submit an enquiry online or call us on 01332 470 400. We will have an initial chat to understand your situation, explain your options, and agree on the next steps. There is no pressure and no obligation. You can also read our how it works page to see the full process from start to finish.