Learn more about mortgages

Mortgages can be confusing. So let's look at the kinds of decisions you'll need to make when choosing a mortgage. 

Repayment types

How you pay your mortgage, and what your monthly payments are made up of, depends on your payment type. You can make payments on a capital repayment basis, an interest only basis, or a combination of the two. If you're new to Nationwide, you can only choose a capital repayment mortgage.

Capital repayment mortgages

Your mortgage balance reduces over your mortgage term
  • Monthly payments cover both the amount you borrowed (capital) as well as the interest on this
  • At the end of your mortgage term, if you've kept up with your monthly repayments, your mortgage will be fully paid off

Interest only mortgages

An interest-only mortgage
  • Monthly payments cover only the interest on the amount you borrowed
  • At the end of your mortgage term, you’ll need to pay off the full mortgage amount outstanding
We no longer offer interest only mortgages for new customers

Mortgage term

Your mortgage term is the amount of time over which you pay your mortgage. We offer terms up to 40 years – you choose this when you take out your mortgage, but you can change your term during the lifetime of your mortgage.

Shorter-term mortgages

Short term mortgages
  • The shorter your mortgage term the higher your monthly payments on a capital repayment mortgage
  • You’ll pay less interest over the lifetime of your mortgage

Longer-term mortgages

Costs of a long term mortgage
  • The longer your mortgage term the lower your monthly payments on a capital repayment mortgage
  • You’ll pay more interest over the lifetime of your mortgage
  • It will take longer to pay off the balance of your mortgage

Figures are based on a mortgage of £160,000, with an APRC (Annual Percentage Rate of Charge) of 4%.

Our two types of mortgage

Fixed

Fixed monthly mortgage payments

Your interest rate won't change as long as you don't make any changes to your mortgage – so you'll pay the same amount each month during the deal period.

Tracker

Monthly mortgage payments tracking the Bank of England base rate.

Your interest rate will change if the Bank of England base rate changes. This means your payments could go up or down during the deal period.

Choosing the length of your deal

Short-term deal

A 2 year mortgage deal with a lower interest rate
  • The shorter your deal, the lower your interest rate.
  • Choose a shorter-term deal and you’ll be able to change your deal sooner.

Long-term deal

A 5 year mortgage deal with a higher interest rate
  • The longer your deal, the higher your interest rate.
  • Choose a longer-term initial deal, and you'll have the security of knowing what your rate is for longer.

* Rates shown are initial rates and are shown for illustrative purposes only – take a look at our rates for more information.

Should you pay a product fee?

Don't pay a product fee

A no fee mortgage with a high interest rate
  • Choose a rate without a fee, and you pay a higher interest rate.

Pay a fee

A fee mortgage with a lower interest rate
  • A fee gives you access to a lower initial mortgage rate and you'll pay less interest across the deal term.
  • You can either pay the fee upfront or add it to your mortgage balance.
  • If you choose to add a fee to your mortgage, you'll pay interest on the higher balance over the full term of the mortgage.

* Rates shown are initial rates and are shown for illustrative purposes only – take a look at our rates for more information.

Now you know the basics, take a look at our rates

Need help choosing the right mortgage for you? Call us on 0800 30 20 10 or pop into your nearest branch