Finding the right rate, term and lender for your home shouldn’t feel like guesswork.
With repayment types, rate options, loan-to-value bands and lender criteria all varying by circumstance, knowing where to start isn’t always straightforward. Smart City Mortgages is an FCA-authorised, whole-of-market mortgage broker giving residential mortgage advice to clients across the UK.
We compare mortgages from across the market, assess your income, deposit, employment and credit history, and manage your application from first enquiry to completion. Whether you’re a first-time buyer, moving home or remortgaging, your adviser takes the time to understand your situation and find a mortgage that fits your plans.
What is a residential mortgage?
A residential mortgage is a loan secured against a home you live in yourself. It differs from a buy-to-let mortgage, which is for a property you rent out and is assessed mainly on rental income. Choosing one means deciding between repayment and interest-only, fixed and tracker rates, and dozens of lenders with different criteria.
Advice early on helps you understand how much you could borrow before you start viewing, avoid a declined application and make your offer with confidence — whether you’re buying alone or with a partner, using a gifted deposit or moving up the ladder.
Why use a whole-of-market mortgage broker?
Many homebuyers start with their own bank, but a bank can only offer its own products. A whole-of-market broker compares mortgages from across the market, including some deals only available through brokers, to find options that better fit your situation and long-term goals. We explain how we are paid before you go ahead, so you know our recommendation is based on your circumstances, not on which lender pays more. You can also speak directly with a mortgage adviser about your options.
Types of residential mortgage
Two choices shape any residential mortgage: how you repay it and how your interest rate works. Together they affect your monthly payments, the total interest you pay and how much certainty you have over your budget.
Repayment mortgages
Each monthly payment covers the interest and part of the amount you borrowed, so by the end of the term the mortgage is fully paid off, provided you keep up payments. This is the most common type of residential mortgage in the UK.
Interest-only mortgages
Monthly payments cover only the interest, so the full loan is still owed at the end of the term. Lenders need evidence of a credible repayment plan, such as investments, savings or the sale of another property, and often set eligibility conditions, including income and deposit requirements. Some lenders also offer part-and-part mortgages that combine both methods.
Fixed rate mortgages
Your interest rate and monthly payment stay the same for an agreed period, usually two to five years. Leaving early usually means paying an early repayment charge (ERC). When the fixed period ends, you move onto the lender’s standard variable rate (SVR) unless you switch to a new deal.
Tracker and discount mortgages
A tracker follows the Bank of England base rate plus a set margin, so your payments rise and fall with it. A discount mortgage offers a reduction on the lender’s standard variable rate (SVR), which the lender can change at any time. Both can start lower than a fixed rate, but with less certainty over future payments.
Not sure whether a fixed or
tracker rate suits you?
Speak to one of our mortgage advisers and compare your options across the market.
What is an Agreement in Principle (AIP)?
An Agreement in Principle (AIP), also called a Mortgage in Principle or Decision in Principle, is a lender’s estimate of how much it may lend after an initial look at your finances. It isn’t a formal mortgage offer, but getting one before you make an offer helps you set a realistic budget and shows estate agents and sellers you are a serious buyer.
Will an AIP affect your credit score?
It depends on the lender. Some run a soft search that other lenders can’t see, while others run a hard search that shows on your credit file. Your adviser will tell you which before you apply.
What affects your mortgage eligibility?
Lenders weigh up several factors when deciding how much to lend and on what terms. Knowing them in advance helps you prepare a stronger application.
1
Income and affordability
Lenders look beyond your salary at your regular spending, childcare costs and other commitments, now and over the mortgage term. Most lend around 4–4.5 times income, and some go higher for certain professions or higher earners.
2
Credit history
Even minor missed payments can limit your options, but you don’t need a perfect score. Some lenders specialise in applicants with past credit problems.
3
Existing debts
Many lenders require a larger deposit if adverse credit is present. Deposits of 15% to 25% are common in more complex credit situations, though requirements vary.
4
Employment status
Employed, self-employed, contractor or company director — each is assessed differently, and some lenders are more flexible than others.
5
Property type
Flats, new builds, older homes and leasehold properties can each narrow the choice of lenders. For leasehold homes, lenders also check the remaining lease length and charges.
6
Deposit
Your deposit sets your loan-to-value (LTV), which affects the products and rates available — see How much deposit do you need? Below.
How much deposit do you need for a mortgage?
Most residential lenders accept a deposit from 5% of the property’s value, and some lenders may offer specialist no-deposit options for specific circumstances. A larger deposit lowers the lender’s risk, so it usually opens up more products and better rates. If you’re buying for the first time, see our first-time buyer mortgages guide.
What is loan-to-value (LTV)?
Loan-to-value (LTV) is the size of your mortgage as a percentage of the property’s value. A larger deposit means a lower LTV, which lenders generally view more favourably.
| LTV band | Minimum deposit | Example deposit on a £300,000 home |
|---|---|---|
| 95% | 5% | £15,000 |
| 90% | 10% | £30,000 |
| 85% | 15% | £45,000 |
| 80% | 20% | £60,000 |
| 75% | 25% | £75,000 |
Rates usually improve with each step down in LTV, with the biggest differences often at 90%, 85%, 75% and 60%.
Costs of getting a residential mortgage
Your deposit isn’t the only cost. Budget for these as well:
Mortgage product fees
Arrangement fees of various amounts, paid upfront or added to the loan. A fee-free deal isn’t always cheaper overall, so compare the total cost over the deal period.
Buildings insurance
Most lenders require it from exchange of contracts.
Valuation and survey
Your lender carries out a valuation; you may also choose a more detailed survey, especially for an older property.
Ground rent and service charge
For leasehold properties.
Solicitor or conveyancer fees
For the legal side of your purchase or remortgage.
Moving costs
Removals, utility connections and any immediate repairs or furnishings.
Stamp Duty Land Tax (SDLT)
Depends on the price and your circumstances. First-time buyers may qualify for relief, and buyers of additional properties pay a surcharge.
Flexible mortgage features to look for
Beyond the headline rate, these features affect how easily you can manage your mortgage over time.
Overpayments — most lenders let you overpay up to 10% of the balance each year without an early repayment charge, reducing the interest you pay or the length of your mortgage.
Payment holidays — some lenders allow a temporary pause or reduction in payments. Interest usually keeps building up, so your later payments or term may increase.
Porting — a portable mortgage can move with you to a new home, subject to a new affordability check, so you keep your rate and avoid an early repayment charge.
Offset mortgages — your savings are set against your mortgage balance, so you pay interest only on the difference. Fewer lenders offer them, and rates are often slightly higher.
Residential mortgages for your situation
First-time buyers
Schemes, deposits from 5% and stamp duty relief.
Self-employed and contractors
Lenders that understand non-standard income.
Home movers
Porting your current deal or switching lenders when you move.
Bad credit
Options if you have missed payments, defaults or CCJs.
Remortgage
Review your options before your fixed rate ends to avoid the SVR.
Advice in your language
Speak to an adviser in six languages.
Documents needed for a residential mortgage application
Having these ready before you apply helps avoid delays:
- Valid passport or driving licence
- Proof of address, such as a recent utility bill or council tax statement
- Your last 3 months’ bank statements
- Your last 3 months’ payslips and latest P60 (employed applicants)
- Your last 2 years’ SA302s and tax year overviews, or company accounts (self-employed applicants)
- Evidence of your deposit, plus a gifted deposit letter if family is contributing
- Your current mortgage statement (if you’re moving home or remortgaging)
Why choose Smart City Mortgages?
Choosing a mortgage broker is about more than finding the right product. You need clear advice, support until completion and a regulated firm you can trust.
- FCA-authorised and regulated — Smart City Mortgages is a trading name of Smart City Group Ltd, authorised and regulated by the Financial Conduct Authority (FRN 933448).
- Whole-of-market advice — we compare residential mortgages from across the market, not a single lender.
- One adviser from enquiry to completion — your adviser works out your budget, arranges your AIP, compares products, submits your application and keeps in touch with your lender, solicitor and estate agent until completion.
- Clear fees — Any applicable broker fee is explained before you proceed. Any fee is confirmed in writing before we start.
- Easy to reach — phone, email, WhatsApp or video call, with advice in six languages.
- Review your deal before it ends — ask us about remortgage options before your fixed rate expires. Your home may be repossessed if you do not keep up repayments on your mortgage.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Having been recommended to use Smart City Mortgages, I am truly thankful for the help I received in remortgaging my house. Rishi was superb from the outset and tailored his advice to suit my specific circumstances. Not only was I provided with the best deal, I was constantly kept abreast of the process and put at ease with updates. I am eternally grateful to Rishi for being so professional, honest and showcasing integrity in putting my mind at peace and helping me to secure my finances. I will definitely be contacting Rishi with any future requirements. Superb find!
Speak to a residential
mortgage adviser today
Buying, moving or remortgaging? Tell us about your plans and we’ll compare the market for you, explain your options in plain English and handle your application through to completion.
Residential mortgage FAQs
A residential mortgage is for a home you live in. A buy-to-let mortgage is for a property you rent out, and lenders assess it mainly on the expected rental income.
Usually at least 5% of the property’s value. A larger deposit gives you access to more lenders and better rates.
Most lenders offer around 4–4.5 times your income, depending on your debts, outgoings and credit history. Use our mortgage calculator for an estimate, and your adviser can confirm what lenders will offer you.
A repayment mortgage pays off the loan and interest over the term. An interest-only mortgage covers only the interest, so you need a separate plan to repay the loan at the end.
A fixed rate gives certainty over your payments for an agreed period. A tracker follows the Bank of England base rate and can rise or fall. Your adviser can help you decide which suits your budget.
You move onto your lender’s standard variable rate (SVR), which is usually higher. Many lenders let you secure a new deal up to six months in advance, so it’s worth reviewing your options early.
Yes. Most lenders want two years of accounts or SA302s, and some accept one.
Often yes, depending on how serious and how recent the issues are. Some lenders specialise in applicants with past credit problems.
Many mortgages are portable, so you can keep your rate on a new property, subject to the lender’s criteria and a new affordability check.
It varies by lender, but a straightforward application usually goes from Agreement in Principle to mortgage offer within two to four weeks.
