Browse our Commonly Asked Mortgage & Protection Questions

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Any questions about mortgages, protection & secured loans – we’ve tried to answer here. If you still can’t find the answer, then contact our team.

What should I do if I'm coming to the end of my fixed rate?

If you’ve got 6 months left on a fixed rate, and you don’t want to pay an ERC (early repayment charge) to switch to a new rate now, you can fix a deal 6 months in advance of the end of your rate with most lenders – this is possible as most mortgage offers are valid for 6 months. That way, if rates continue to decrease between now and then you can look at switching to a lower rate in that time. On the other hand, if rates continue to increase you’ll have secured your rate and won’t be affected by any impending rate increase in that time.

What does Loan to Value (LTV) mean?

Loan to value, or LTV, is a calculation which expresses the value of your mortgage as a percentage of the value of your property: loan / value x 100 = LTV %.

The LTV is important, because across the mortgage market, lower interest rates tend to be offered to those with lower LTVs, for example less than 60%.

How much can I borrow?

Most lenders will typically offer up to four times the main earner’s income, or slightly lower multiples of joint income. Other lenders will look at ‘affordability’, basing their lending decision more on your credit history/credit score and your net pay after your regular bills and commitments.

This can sometimes mean you can borrow more, but remember that you must always be sure you can afford the monthly payments.

Can I transfer my property onto a new property if I moved?

Some mortgages are portable – this means that if you move house, you can take your current mortgage to your new home (called ‘Porting’), often for little or no cost. The lender may require additional proof of income or credit status at the time of porting your mortgage, so if your circumstances have changed or you require a substantially different mortgage amount, you may no longer fit that lender’s criteria and a new lender may be your only option.

Why do lenders wish to see my credit file?

Your credit file will list credit history details about you over the previous 6 years, such as mortgages, unsecured debt – credit cards, loans, car finance, overdrafts, mobile phone contracts and utility contracts, such as gas & electricity. In addition, your credit file will give details of your payment history for this credit agreements. The most widely used credit file checking agencies that lenders use are Equifax and Experian, although there are other agencies available. By allowing lender to view details on your credit file, they can build a profile of what you are generally like as a borrower and the level of your available credit.

What are the different types of mortgage interest rates?

a) Variable rate – your monthly repayments will vary as & when your lender’s standard variable rate (SVR) changes.

b) Fixed rate – your monthly repayments will be fixed for as long as the interest rate is fixed.

c) Discounted rate – your monthly repayments will vary as & when your lender’s standard variable rate (SVR) changes, but will remain lower than repayments on a variable rate mortgage.

d) Tracker – your monthly repayments will vary according to either the Bank of England base rate for set period of time, or can be for the lifetime of the mortgage.

How much does life insurance cost?

Life insurance costs vary according to how much cover you need, your age, and other factors such as your health history. Some premiums start from as little as £5 per month, but to get a more accurate idea of how much your cover could cost speak with one of our experts.

Why use a broker and not just set something up online myself?

Insurers won’t always offer you every type of cover when you do directly to them, and comparison websites can sometimes be limited in the range of policies. Exploring your protection options with us means we can talk you through the types of cover available from different insurance companies and help you work out what you need. This means you understand how your plan protects you and your family but also you have peace of mind it has been set up correctly.

How important is it to get a bespoke protection package?

It’s really important. We have so many clients that have cover that is very rarely what they actually thought they had, as there’s lots of different types of Life Insurance. You can have a decreasing cover, or level cover, and a lot of people might not know what’s best for them in their situation. For family purposes, it’s really important to make sure that you’re getting exactly the right amount of cover for the right time for your individual situation and getting the term right for mortgage cover.

What is ‘decreasing term’ insurance?

With decreasing term insurance you are covered for a set period of time but the level of the cover decreases every month until it reaches zero at the end of the term. This policy is best for people who know their sum insured is decreasing. For example, if they have a repayment mortgage which is reducing the amount they owe month by month.

What is ‘level term’ insurance?

Level term insurance keeps you covered for a set period of time chosen by you when you take out the policy. It pays out a fixed amount if you die within the agreed term and is one of the most popular types of policy. Level term cover is usually best for people who want to know their dependants will be provided for until they are old enough to take care of themselves.

Once I have my policy, can I change my policy details?

Yes. It is really important that your cover remains up-to-date. Your life insurance needs will change over time and we recommend that you should regularly review your policy to make sure your premiums are still competitive and that you still have the right amount of cover. CoG customers can contact us at any time and we’ll be on hand to discuss changes in circumstances and advise accordingly.

What are the benefits of taking out a second charge mortgage?

As with all finance options, there are many benefits to taking out a second charge loan such as being able to keep your existing mortgage deal which can be very valuable if interest rates have gone up or your credit rating has gone down. Other benefits to second charge mortgages include:

Easier to access as a secured loan, compared to unsecured loans.
You won’t have to extend your current mortgage term.
You don’t need to pay early repayment charges or penalties to remortgage.

As with all business loans, there are benefits and drawbacks to second charge mortgages so it’s important to consider all options before deciding to apply.

Are second charge mortgages regulated?

Yes, second charge mortgages are regulated by the FCA (Financial Conduct Authority). Just like standard mortgages are.

How long does it take to get a second charge mortgage?

The process typically takes 4-6 weeks and involves a property valuation, credit check, and legal paperwork. However, we are often able to secure second charge mortgages in 2-3 weeks, depending on the case.

Can I use a second charge mortgage for business purposes?

Yes, you can, but it depends on the lender you use. Some lenders allow a second charge mortgage to be used for business purposes, or any kind of personal use, and they’re more relaxed on your spending in general – but it depends on the lender’s criteria. It’s a good idea to seek professional advice to find a suitable lender.

What’s the difference between a secured and unsecured loan?

The difference between secured loans and unsecured loans is the fact that a legal charge is taken against an asset when you opt for secured borrowing. An unsecured personal loan does not involve security being taken over a property.

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