House Loan Guide: What You Need to Know

If you’re thinking about buying a home, the first question on most people’s minds is, “How do I get a house loan?” The answer isn’t a one‑size‑fits‑all formula, but you can break it down into a few clear steps. In this guide we’ll cover the basics of mortgage types, what lenders look for, how to size your down payment, and a few tricks to lower your overall cost.

Understanding Different House Loan Types

There are three main loan categories you’ll run into: fixed‑rate, variable (or tracker) and government‑backed schemes. A fixed‑rate mortgage locks your interest for a set period—usually two, five or ten years—so your payments stay predictable. Variable loans follow the Bank of England base rate, which means your monthly amount can rise or fall. They often start cheaper, but you need a cushion for possible hikes.

In the UK you also have options like Help to Buy or shared‑ownership schemes. Those let you buy a slice of a property and rent the rest, reducing the amount you need to borrow. If you’re a first‑time buyer, these programs can shave thousands off the amount you’d otherwise need as a deposit.

How to Lower Your Down Payment & Get Better Rates

Most lenders expect a deposit of 5‑20 % of the purchase price. A bigger deposit usually means a lower interest rate because you’re seen as less risky. But if you don’t have 20 % saved, don’t panic. Look for local down‑payment assistance, government grants, or ask family members to act as guarantors.

Your credit score plays a big role, too. A score above 750 often unlocks the best rates, while anything under 600 can push you into higher‑cost loans. Simple steps—paying down existing credit‑card debt, avoiding new credit inquiries, and checking your credit report for errors—can boost your score in a few months.

When you compare offers, focus on the Annual Percentage Rate (APR) rather than just the headline rate. The APR includes fees, arrangement costs and any early‑repayment penalties, giving you a true picture of what you’ll pay over the loan’s life.

Before you sign, ask the lender for a “mortgage illustration” that shows how your payments change if interest rates rise. This helps you avoid sticker shock if the market shifts.

Finally, consider the loan term. A 25‑year mortgage spreads the cost thin, making monthly payments easier, but you’ll pay much more in interest. A 15‑year loan costs more each month but saves you thousands in the long run.

Bottom line: a house loan isn’t just about getting approved—it’s about finding the mix of rate, term, and deposit that works for your budget. Do the homework, compare a few lenders, and don’t be shy about asking questions. With the right plan, the keys to your new home can be in reach sooner than you think.