Learn what mortgage is, how it works, and the key steps to getting one for your UK home purchase.
What Is a Mortgage?
A mortgage is a type of loan used to buy property or land, most commonly a home. When you take out a mortgage, you borrow money from a lender—usually a bank or building society—and agree to repay it over an agreed period, often between 20 to 35 years. The property acts as security for the loan, which means if you fail to make your repayments, the lender can take possession of the property to recover their money.
In the UK, mortgages come in different types, such as fixed-rate, tracker, and variable-rate mortgages. Each option offers different interest rates and repayment terms, allowing buyers to choose one that fits their financial situation. The amount you can borrow depends on your income, credit score, deposit size, and the lender’s criteria. Most buyers need to provide a deposit of at least 5% of the property’s value, though a larger deposit can help you secure better rates.
Understanding what a mortgage is and how it works is essential before buying a home. It’s one of the biggest financial commitments most people make in their lifetime, so it’s important to compare lenders, check affordability, and seek expert advice. Whether you’re a first-time buyer or remortgaging your property, getting the right mortgage can help you save thousands over time and make your homeownership journey much smoother.
There are several types of mortgages in the UK, each designed for different needs. Here are the main ones:
A mortgage works by spreading the cost of buying a home over many years. You borrow a set amount from a lender, then repay it in monthly instalments that include both capital (the loan itself) and interest (the lender’s charge for borrowing the money).
Your lender will assess your income, credit history, and affordability before approving the loan. The interest rate you pay determines how much your repayments will be—lower rates mean lower monthly costs. Over time, as you make payments, you gradually own more of your property until the mortgage is fully repaid.
The mortgage process begins with checking your affordability and getting a mortgage agreement in principle (AIP) from a lender. This shows how much you could borrow. Once you find a property, you’ll submit a full mortgage application, and the lender will carry out a valuation to ensure the property is worth the loan amount.
If approved, you’ll receive a formal mortgage offer. After legal checks and contracts are completed, your lender releases the funds to your solicitor, and you can finally complete your purchase and move into your new home.
Throughout the process, working with a qualified mortgage broker or adviser—like Rock Finance—can make things much easier. They help you compare deals, handle paperwork, and find the right mortgage for your needs.
Mortgage affordability refers to how much you can realistically borrow and repay based on your financial situation. In the UK, lenders carefully assess your income, expenses, credit score, and deposit size to decide how much they’re willing to lend. Most lenders will let you borrow around four to five times your annual income, though this can vary depending on your financial circumstances.
To work out affordability, lenders conduct a detailed affordability check. This includes looking at your monthly commitments—such as loans, credit cards, childcare, or other bills—to ensure you can comfortably manage mortgage repayments even if interest rates rise. They also evaluate your employment status, the stability of your income, and any future financial risks.
Your deposit also plays a big role. A larger deposit (for example, 10%–20%) not only improves your chances of approval but can also give you access to lower interest rates. On the other hand, a smaller deposit may limit your options and result in higher monthly payments.
If you’re unsure how much you can afford, using a mortgage calculator or speaking with a mortgage adviser—like Rock Finance—can help you get a clear picture of your borrowing potential. With expert guidance, you can find a deal that fits your budget and ensures long-term financial stability.
A mortgage is a long-term loan used to buy property. You borrow from a lender and repay monthly with interest until the loan is fully paid off.
There isn’t one set credit score to get a mortgage. Every lender is different and looks at your full financial history, income, and spending. A higher credit score can improve your chances of approval and help you get a better mortgage deal.
Use our mortgage calculator to check how much you could borrow based on your income, expenses, and deposit amount. It helps you plan your budget before applying.
Our experienced advisors are here to help you find the best solution tailored to your needs.
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