MBS Lending Mortgages

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Last updated on 22 March 2021.

MBS Lending Mortgages FAQ

What is an MBS Lending mortgage?

MBS Lending mortgages are loans, either for residential or buy-to-let properties, allowing borrowers to purchase properties while repaying the loan in instalments over many years. Many mortgages require the loan to be paid back incrementally, along with interest every month.

Why does interest matter on a mortgage?

Mortgages are some of the greatest financial commitments people can make because of the sheer length of time spent repaying them and the costs involved. Getting a suitable rate of interest is crucial, as it means the difference between being able to meet monthly repayments and defaulting.

What determines mortgage interest rates?

This depends. If you opt for a fixed-rate product, you choose to fix interest at one rate over a period of up to five years, keeping costs under control for a time. If you choose a variable-rate product, the mortgage markets ultimately determine the rate you pay, so overall costs may fluctuate.

Is a two-year fixed rate cheaper than a five-year fixed rate?

Yes. Fixing interest over a longer period of time would entail a greater level of risk for the provider you have borrowed from, so they may be keen to mitigate that by charging a higher rate of interest for a longer fixed rate.

Will interest rise on a fixed-rate mortgage if market rates rise?

No. One of the benefits of fixed-rate mortgages is that, when rates rise across the market, you will be immune from this, having locked in a lower rate during the mortgage application. This can save you a great amount in reduced interest costs over time.

What is required to apply for the typical mortgage?

Proof of income in the form of payslips and a suitable form of ID, as well as bank statements and records of outstanding debts. These documents all help them determine your creditworthiness and how likely it is that you can afford a mortgage.

Is bad credit an impediment to seeking a mortgage?

Not necessarily. Some providers may deny you a mortgage altogether, but some may accept an application. Please note that this may come with caveats and higher costs. Poor credit denotes greater risk, so you may only find mortgages with high interest as a consequence.

Do interest-only mortgages help reduce costs?

Yes. Interest-only mortgages can keep a lid on monthly mortgage payments, as you are obliged only to pay the interest from month to month, rather than interest plus the mortgage instalments. However, this doesn’t mean the loan goes unpaid forever. In fact, it is usually repaid as a lump sum when the term ends.

How do I compare the best MBS Lending mortgages?

To help you determine which mortgage product is best suited to your financial situation, make use of NerdWallet’s comparison tables. They are specially designed to showcase a variety of products and can help you find a deal that is most affordable for you in the long term.

Services offered by this provider may change over time. Always check Ts&Cs.

NerdWallet has selected Koodoo to provide you with this information-only online comparison service on a non-advised basis. NerdWallet will receive a share of the commission that Koodoo earns from the lender or from our partnered broker, Fluent Mortgages.

Koodoo is the trading name of Mortgage Power Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 845978), and is a registered company in England and Wales (company registration number 10978680), with a registered address at Scale Space, 58 Wood Lane, London, W12 7RZ

Fluent Mortgages Ltd is authorised and regulated by the Financial Conduct Authority (FRN 458914), and is a registered company in England and Wales (company registration number 10978680), with a registered address at 102 Rivington House, Chorley, New Road, Horwich, Bolton, BL6 5UE