Common questions

• Can I get a mortgage offer before I find my property?
• Must I clear my home loan by a certain age?
• What does APR mean?
• How do I repay capital with an interest-only loan?
• Do I always need life insurance?
• What other costs might I incur in taking out a mortgage?
• What is the difference between a Standard Variable Rate (SVR) and a Tracker Rate?
• What is a Higher Lending Charge (HLC)?
• What is the Early Repayment Charge for my mortgage?
• What if I want to rent out my property?
• What if I lose my job?
• What if I am having trouble paying my mortgage?
• Do you offer mortgages for overseas properties?
• Do you offer shared ownership or shared equity mortgages?
• What's the minimum and maximum mortgage term?
• What does Bank of England base rate mean?
• What is a fixed rate mortgage?
• What is a tracker mortgage?

Can I get a mortgage offer before I find my property?

You can choose the mortgage that suits you best and get an 'agreement in principle' from a lender. However, your lender won't make a formal mortgage offer until a valuation has been carried out on the property you wish to buy or remortgage.

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Do I have to repay my mortgage by a certain age?

Typically, a mortgage needs to be repaid no later than your retirement age. We may consider extending the term up to the age of 70, if you are able to evidence that you have sufficient income, post retirement. If your retirement age is greater than 65, we will also assess income post 65.

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What does APR mean?

APR stands for Annual Percentage Rate. It is there to help you compare the cost of different mortgage deals. It takes into account the amount of interest you will pay, the term of the mortgage and certain other charges, such as product and valuation fee.

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What does APR mean?

APR stands for Annual Percentage Rate. It is there to help you compare the cost of different mortgage deals. It takes into account the amount of interest you will pay, the term of the mortgage and certain other charges, such as product and valuation fee.

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How do I repay capital with an interest-only mortgage?

Interest-only mortgages pay off only the interest on your mortgage, not the money you borrowed in the first place. In order to repay the capital borrowed, you will need to save money in a separate plan. The main options for saving in this way are by using an Individual Savings Account (ISA), an endowment policy or a pension.

Most mortgage products also allow you to make overpayments of up to 10% of your outstanding mortgage balance each year. Check the product details of the mortgage you are interested in for confirmation.

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Do I always need life insurance?

Life insurance is not always mandatory when taking out a mortgage. However, having the right protection in place gives you and your family peace of mind knowing that financial help will be available if you are no longer able to provide that security. Don't forget that as well as covering any mortgage borrowing you may also wish to make provisions for ongoing household costs. In addition many policies offer optional critical illness cover which can cover events such as heart attacks and long term illness. Find out more about life insurance.

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What other costs might I incur in taking out a mortgage?

When you take out a mortgage you should be aware that, on top of the mortgage cost, you will also have to pay a valuation fee. The amount of this will depend on the type of valuation carried out. You may need to pay a product fee for your selected mortgage, plus legal fees which will include search fees, and land registry charges. You will also have to pay stamp duty on properties over £125,000.

Once you exchange contracts, your lender will insist that you take out adequate buildings insurance and it is advisable, but not compulsory, to take out contents insurance. Find out more about insuring your property.

Some mortgages offer a free valuation, or a refund on or after completion, whilst others include cashback sums that you can use to offset your costs. If you are remortgaging your property, you may also find that your new lender will offer to pay some or all of the legal costs.

You should always look at the total mortgage package and not just focus on costs or just on the interest rate.

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What is the difference between a Standard Variable Rate (SVR) and a tracker rate?

The SVR of each lender is set by that lender and they can vary it at any time.

With a tracker rate, the mortgage tracks an independently set interest rate.

RBS tracker mortgages track the Bank of England base rate which means your interest rate will fluctuate inline with any Bank of England base rate changes.

The Bank of England Base Rate can move up or down and this decision is announced once a month by the Monetary Policy Committee.

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What is a Higher Lending Charge (HLC)?

The Higher Lending Charge is a fee that reflects the increased risk to the lender when the loan is a large percentage of the value of the property. (The lender may agree that you can add the Higher Lending Charge to your mortgage, although this means that you will pay interest on it). For RBS, the Higher Lending Charge rate is only applicable for loans over 90.01% Loan to Value (LTV). We will discuss this with you as part of the mortgage appointment if applicable.

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What if I want to rent out my property?

You'll need to ask our permission. If we agree to the request we will issue a letter of consent and charge an administration fee of £100. You can remain on your existing deal until that ends. When you take a new deal, if you are renting the property out, you'll need to select a rate from our attractive range of buy-to-let products.

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What if I lose my job?

You must tell us immediately of any change in your circumstances that could affect your ability to meet your mortgage repayments.

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What if I am having trouble paying my mortgage?

Treating you fairly when you cannot pay your mortgage

If you are having trouble paying your mortgage, we will treat you fairly.

What you can do to help us:

• Tell us as soon as possible if you are having problems repaying your mortgage, or anticipate having problems.
• Get in touch with us quickly if we try to contact you.
• Make sure you keep any other people paying the mortgage, and anyone guaranteeing the mortgage, up to date with what is happening.
• Keep to the payment plan we agree with you. If you do not make the payments, we might have to go to court to get back any money you owe us or to repossess your property.
• Check whether you can get any state benefits or tax credits.
• If you have an insurance policy, check whether it would help with your payments.
• Tell us if you move to a new address.

You may want to talk to a professional adviser, such as a debt counsellor or a lawyer, before you change your mortgage arrangements.

We will:

• contact you as soon as possible to discuss your problem;
• talk to agencies who give advice (for example, Citizens' Advice) and are acting on your behalf if you want us to;
• give you a reasonable time to pay back the debt; and
• only start proceedings to repossess your home if we cannot solve the problem with you.

We might be able to:

• arrange a new payment plan with you taking your and our interests into account;
• change the way you make your payments or the date you make them;
• allow you to pay back your mortgage over a longer period of time (which could reduce your monthly payments). This may increase the total amount you pay back;

If we cannot do any of these things, we will tell you why. If we can make one of these arrangements with you, we will explain how it would work and give you an agreed period of time to consider it first.

Costs and charges

We may charge you for administrative and legal costs. We will tell you the amount you will have to pay.

If we cannot agree on a solution

• We will keep trying to solve the problem with you, by talking to you about a payment plan, throughout the process or assisting you with the sale of your property.
• If we cannot agree on a payment plan with you, we may go to court to start proceedings to repossess your home.
• Before we repossess your home, we will give you advice about getting in touch with your local authority to see if they can find you somewhere else to live.

If we repossess your home

• We will sell it for the best price we can reasonably get. We will try to sell it as soon as possible.
• We will give you reasonable time to take your possessions from your home.
• We will use the money raised from selling your home to pay your mortgage first, then any other loans or charges secured on the property.
• If there is any money left over, we will pay it to you.

If selling your home does not raise enough money to pay off the mortgage

• If there is not enough money from the sale to pay the whole mortgage, you will still owe us the amount that is left. We will tell you what this is as soon as possible and contact you for you to arrange to pay back what you still owe.
• If you bought your home with other people, each of you is responsible for all the money borrowed. This is true even if you normally only pay part of the mortgage.
• We will take account of your income and outgoings when we arrange a payment plan with you. But if we cannot arrange a suitable plan, we may go to court to get our money back. You might have to pay the court costs.
• Not being able to pay off your mortgage could affect whether you are able to get credit in future.

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Do you offer mortgages for overseas properties?

No, we only offer mortgages on properties in England, Scotland and Wales.

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Do you offer shared ownership or shared equity mortgages?

We offer shared equity mortgages provided you're buying your home through a Government-backed shared equity scheme. Unfortunately we do not offer shared ownership mortgages at this time.

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What does Bank of England base rate mean?

The official bank rate (also called the Bank of England base rate or BOEBR) is the interest rate that the Bank of England charges banks for secured overnight lending. It is the Government's key interest rate for managing monetary policy.

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What is a fixed rate mortgage?

It's a mortgage where the rate of interest you pay is fixed for an agreed term. So you always know how much your mortgage payments will be during that term even if interest rates go up or down. At the end of the fixed rate term you'll usually revert to the Standard Variable Rate.

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What is a tracker mortgage?

With this type of mortgage the rate of interest you pay is normally the Bank of England base rate plus a set percentage. If the base rate rises or falls, so will your monthly mortgage payments. Tracker rate mortgages usually have a minimum interest rate. At the end of the tracker term you'll usually revert to the Standard Variable Rate.

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