When choosing a mortgage, it helps to understand the different options available.

Each mortgage type comes with its own structure, interest rate behaviour and suitability depending on your personal circumstances.

This guide covers the most common types of mortgages in Coventry, how they work, and how to decide which might be the right fit for you.

Whether you’re a first time buyer in Coventry, a homeowner planning to remortgage, or someone aged 50+ looking at borrowing options later in life, your mortgage advisor will talk you through each type in detail and help you decide what suits your situation.

Fixed Rate Mortgages

Fixed rate mortgages remain one of the most popular choices for first time buyers and those looking for remortgage advice in Coventry. The appeal lies in payment certainty.

You agree to a fixed interest rate for a set number of years, meaning your monthly repayments stay the same for that period.

Common fixed terms include two, three, five, seven, ten or even fifteen years.

Once the fixed period ends, your lender will usually move you onto their standard variable rate (SVR), which is typically more expensive unless you remortgage to a new deal.

If you’re looking for stability or are budgeting carefully, a fixed rate mortgage may offer the reassurance you’re after.

Tracker Mortgages

A tracker mortgage follows the Bank of England base rate, plus a set percentage defined by your lender.

For example, if the base rate is 5.25% and your tracker is set at base rate plus 1%, your rate becomes 6.25%.

If the base rate changes, your mortgage payments will adjust accordingly. Most trackers are offered on a short-term basis, typically lasting around two years before you revert to the lender’s SVR.

Some tracker mortgages include a ‘collar’ that limits how low the rate can go, even if the base rate falls.

Discount Mortgages

Discount mortgages are variable rate products that offer a temporary reduction off your lender’s SVR. For instance, if the SVR is 5% and your mortgage includes a 2% discount, your payable rate would be 3%.

These deals usually come with a short introductory period, commonly two years. After that, you move to the full SVR unless you switch to another mortgage.

As discount rates are still linked to a variable product, monthly payments can rise or fall depending on how the lender adjusts its SVR.

Standard Variable Rate (SVR) Mortgages

Each lender sets its own standard variable rate. While this rate is influenced by the Bank of England base rate, it’s not directly tied to it.

SVRs can change at the lender’s discretion and are usually higher than fixed or introductory rates. Borrowers often move onto an SVR when their fixed, tracker or discount period ends.

It’s rare for people to choose an SVR from the outset, as other products tend to offer better value in the early stages.

That said, if you’re currently on one, it’s often worth exploring remortgage options to secure a better rate.

Choosing Between Fixed and Variable Mortgages

Whether a fixed or variable rate is more suitable depends on your long-term plans and how much flexibility you need.

Fixed rates are ideal for those who want predictable payments and plan to stay in the property for several years.

Variable rates offer potential savings if interest rates fall, but come with the risk of payments increasing if rates rise.

Your mortgage advisor in Coventry will explain the pros and cons of each option based on current market conditions and your future goals.

Other Mortgage Types You Might Consider

Interest Only vs Repayment Mortgages

Mortgages are usually set up on a repayment basis, where each monthly payment includes both interest and part of the loan itself.

This gradually reduces your balance over time until the mortgage is fully repaid.

Interest only mortgages in Coventry, on the other hand, involve paying just the interest each month. You’ll need to repay the full balance in one lump sum at the end of the term.

These are less common and generally require a clear repayment strategy in place.

Joint Mortgages

If you’re buying with someone else, such as a partner, family member or friend, you may take out a joint mortgage.

Both names will appear on the mortgage and property deeds, and both parties will share legal and financial responsibility for the repayments.

A joint mortgage can improve affordability by combining incomes, which may help secure a larger loan.

Offset Mortgages

Offset mortgages link your mortgage to a current or savings account with the same lender.

Instead of earning interest on your savings, the balance is offset against your mortgage, reducing the amount of interest charged.

This can help reduce your mortgage term or monthly repayments. Offset mortgages are more flexible and can suit those with larger savings balances or irregular income patterns.

Guarantor Mortgages

A guarantor mortgage in Coventry may be suitable for buyers who are struggling to meet standard affordability checks, such as those with limited income or poor credit history.

In this setup, a parent or close relative agrees to cover the repayments if you are unable to. Their income or assets are taken into account by the lender to increase your borrowing capacity.

This option can be helpful for younger buyers or those with financial challenges, but it comes with risks for the guarantor, who must be willing and able to cover repayments if needed.

Speak to a Mortgage Broker in Coventry

If you’re exploring your options and want to understand which mortgage type is right for you, our mortgage advisors in Coventry are here to help.

Whether you’re applying for the first time, reviewing your rate, or exploring borrowing options over the age of 50 in Coventry, we’ll take time to understand your situation and explain your choices clearly.

Date Last Edited: October 9, 2025