Mortgage options (including buy-to-let)

Mortgage options: the main types explained

Choosing a mortgage can feel complicated. Lenders may describe similar products using different names, and the details that matter most—such as how the interest rate is set, how long it lasts, and what happens when it ends—can be buried in the small print.

This guide summarises the most common mortgage options used in the UK, including the key features of fixed and variable rates, rate-linked deals, and repayment methods. It also includes a dedicated section on buy-to-let mortgages.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Variable rate mortgages

A variable rate mortgage is one where the interest rate can change over time. The lender may adjust the rate in response to wider market conditions and their own pricing decisions.

What this means for you

• Your monthly payment can rise or fall depending on the lender’s variable rate.
• There is less certainty over future costs compared with fixed-rate deals.

Fixed rate mortgages

A fixed-rate mortgage sets the interest rate for a defined period. During the fixed term, the interest rate (and therefore your monthly payment) is designed to stay the same.

What this means for you

• More predictable budgeting while the fixed rate is in place.
• Costs may change once the fixed period ends.

Fixed terms vary by lender and product, so it’s important to consider both the length of the fixed period and what the mortgage could revert to afterwards.

Buy-to-let mortgages

A buy-to-let (BTL) mortgage is intended for purchasing a property to let out to tenants, rather than for owner-occupation.

How buy-to-let lending is typically assessed

• The mortgage amount is often influenced by the expected rental income and the size of the deposit.
• Lenders generally assess affordability in a way that reflects the rental nature of the investment.

What this means for landlords

• Rental income can affect how lenders assess the mortgage, but the approach can vary.
• Buy-to-let arrangements can involve additional considerations such as property management, void periods, and ongoing costs.

The Financial Conduct Authority does not regulate some forms of buy-to-let.

Your property may be repossessed if you do not keep up repayments on your mortgage.

Discounted rate mortgages

A discounted rate mortgage offers a rate that is reduced compared with the lender’s standard variable rate for a set period.

What this means for you

• The discount is usually time-limited.
• Because the discount is linked to the lender’s standard variable rate, payments can change when the discount ends or if the standard variable rate changes.

Tracker mortgages

A tracker mortgage is designed to follow an external rate—commonly the Bank of England base rate.

What this means for you

• When the tracked rate changes, your mortgage rate can move as well.
• Depending on the deal structure, the mortgage may track above or below base rate, affecting the direction and size of changes.

Capped rate mortgages

A capped rate mortgage limits how high the interest rate can go by placing a ceiling on the rate charged.

What this means for you

• There is a maximum interest rate level during the cap period.
• If the lender’s standard variable rate falls below the cap, the mortgage rate may also fall.

Repayment mortgages

A repayment mortgage is structured so that your monthly payments cover both:

• the interest, and
• a portion of the capital (the amount borrowed).

What this means for you

• If you make the agreed repayments on time, the mortgage balance is intended to be cleared by the end of the term.
• This is often viewed as a straightforward way to ensure the loan is repaid.

Interest-only mortgages

An interest-only mortgage requires you to pay only the interest each month, while the original loan balance remains outstanding.

What this means for you

• You’ll need a separate plan to repay the capital at the end of the term.
• Many borrowers use savings, investments, or other arrangements to target repayment, but the outcome can depend on performance and timing.

Choosing between mortgage types: what to consider

When comparing mortgage options, it’s helpful to focus on the features that drive your long-term cost and risk profile:

• Rate structure: fixed, variable, discounted, tracker, or capped.
• How payments behave over time: whether payments are designed to stay stable or move with market changes.
• Term and end-of-deal position: what happens when a fixed/discounted period ends.
• Repayment method: repayment vs interest-only and how the capital is intended to be cleared.
• Your wider circumstances: income stability, future plans, and how comfortable you are with payment changes.

Mortgage options for different situations

Mortgage needs can vary widely depending on whether you’re buying to live in the property, buying as an investment, or re-mortgaging.

• Home-buyers often weigh fixed vs variable options alongside repayment method to match budgeting preferences.
• Buy-to-let landlords typically consider how the mortgage is assessed alongside rental income expectations and the practical realities of letting a property.

This overview is designed to help you understand the main mortgage product types so you can ask the right questions and compare like-for-like when reviewing options.