Legal & risks
Important information
Affording repayments
Changes in circumstances
Negative equity
Repaying existing loans
Total amount payable
Further information
Your information
Your home may be repossessed if you do not keep up repayments on your mortgage.
Important information
Important information about mortgages
There are a number of different risks with taking out a mortgage that we want you to understand and plan for.
Affording repayments
Make sure you can afford your repayments now and in the future
Interest rates can go up as well as down. If interest rates go up and you choose a variable rate mortgage, your mortgage repayments will go up as well. If you choose a fixed rate mortgage you're protected against this risk for the duration of the fixed period but after that, your repayments will also fluctuate.
Don't just think about your mortgage. You need to consider too any other borrowing you have or may have in the future such as personal loans and credit cards.
If you take out a mortgage with someone else, then each of you will be equally responsible for the whole loan and the repayments and not just a share of them, regardless of how you and your joint borrower hold the title to the property.
So please don't over extend yourself and allow enough room in your finances to cover any future interest rate rises.
Changes in circumstances
Bear in mind, your circumstances may change
Starting a family, taking a career break, changing your job, retiring - these are some of the events that may affect your ability to repay your mortgage. So please think about your future plans and take them into account when taking on your new mortgage.
Some events you don't plan for, they just happen. Events like losing your job, splitting up from your partner, suffering a serious illness, or dying. The kind of insurance products you can use to cope with the unexpected are detailed in our insurance section. Please consider them carefully. Without appropriate insurance you may not be able to keep up your mortgage repayments.
Negative equity
UK house prices have increased significantly over recent years but please don't assume that trend will necessarily continue. Your home may fall in value. This could mean your home becomes worth less than the value of your mortgage, what people call negative equity. This is more likely to happen if you're borrowing a high percentage of the value of your home.
Repaying existing loans
Repaying existing loans or credit cards
If you're looking to incorporate any of your own or someone else's existing debt with your new mortgage then we'll be able to help you.
If the additional amount you want to borrow is less than 10% of the total amount you're looking to borrow and less than £15,000, and you don't consider it to be a main reason for applying for a mortgage, then we'll be able to provide you with advice on our products.
If the additional sum you're looking to borrow is greater than these amounts, then we will still be able to provide you with enough information on our mortgages for you to make up your own mind.
There are three important aspects to consider before you add existing debt to your new mortgage:
By adding a loan or credit card balance to your mortgage, you're securing the debt against your home, which means your home may be repossessed if you do not keep up repayments on your mortgage.
Adding existing debts to your mortgage over a longer period of time could increase the total amount that you'll pay.
If you're having payment difficulties on your existing debt it may be better for you to negotiate an arrangement with your current credit provider to repay them rather than add debts to your mortgage.
Total amount payable
Adding existing debts to your mortgage over a longer period could increase the total amount that you'll pay.
You may want to consider different loan terms for different purchases.
This will ensure that you don't end up paying for your purchase, for example a holiday or car, long after having the benefit of it has gone. This means that you will keep your interest payments to a minimum.
Further information
After reading this information or receiving advice from us, if you do not understand any aspect of the mortgage or the risks associated with it you should not proceed with the loan.
Your information
In order to make a decision whether we can give you a mortgage we rely on you giving us accurate and comprehensive information.
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If you find yourself in Financial difficulties, visit our help and advice section.
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