This guide is for information purposes only and does not constitute financial advice. Your home may be repossessed if you do not keep up repayments on your mortgage.
Whether you’re buying your first home or reviewing your current mortgage, understanding how home finance works can help you make confident, informed decisions. Prosper’s financial guidance service is here to support you every step of the way.
What is a mortgage?
A mortgage is a loan used to purchase a property, secured against the home itself. This means the lender can repossess the property if repayments aren’t made, which is a key reason why understanding your options matters.
Mortgages are designed to make homeownership more accessible by spreading payments over time, typically 25 to 30 years.
How do mortgages work?
When you take out a mortgage, you borrow a fixed amount and repay it – with interest – over an agreed term.
There are two main types of interest rates:
Fixed rate: Your interest rate stays the same for a set period, giving you certainty over monthly payments.
Variable rate: Your rate can change based on your lender’s criteria or the Bank of England’s base rate.
Your monthly repayments are determined by:
The amount borrowed
The interest rate
The length of the mortgage term
If you’re unsure how these elements affect your overall financial position, Prosper’s financial guidance can help you weigh the long-term impact.
For first-time buyers
Securing your first mortgage can feel overwhelming but it doesn’t have to be. Key considerations include:
A deposit of typically 5–10% of the property price
Proof of income and affordability
A healthy credit profile
You’ll also need to choose between:
Repayment mortgage: You pay both the loan and interest over time.
Interest-only mortgage: You pay only the interest each month and repay the capital later. This is often used for buy-to-let or more flexible wealth strategies.
Additional costs such as legal fees, valuation reports, and lender charges can catch people off guard. A session with a Prosper financial planner can help you budget for the true cost of buying a home.
Why remortgage?
Remortgaging — switching your mortgage to a new deal — can be a smart financial move.
Common reasons include:
Securing a more competitive interest rate
Releasing equity for renovations or other investments
Adjusting your mortgage term or type to better fit your financial goals
Before making any changes, it’s important to check for early repayment or exit fees. At Prosper, we can help you understand the implications and plan accordingly.
Why talk to Prosper about mortgages?
Prosper’s financial guidance service — delivered in partnership with Horizon Financial Planning and Coaching — is designed to help you navigate life’s big financial decisions, including mortgages, without pressure or product sales.
Whether you’re a first-time buyer, property investor, or looking to make the most of your home’s equity, our fixed-fee service offers transparent, impartial support.
Our service can help you with:
Understanding the real cost of homeownership
Exploring repayment versus interest-only options
Planning around early repayments, remortgaging, and equity release
Building your wider financial plan with property as a key component
However, Prosper does not offer personal recommendations on specific mortgage products.
Book your free consultation
With no obligation, Prosper offers truly unbiased guidance.
It is provided by our partner Horizon Financial Planning and Coaching, led by Chris Smith, a Chartered Insurance Institute (CII) member with over 30 years of experience in financial services, including a tenure as Global Head of Conduct and Compliance at HSBC.
Join Prosper and book your free consultation to take the first step toward confident homeownership.
Prosper and Horizon Financial Planning and Coaching do not offer regulated advice.
Glossary
Deposit: The upfront payment toward your property purchase
Interest rate: The cost of borrowing, usually shown as a percentage
Equity: The part of your property you own outright
Remortgage: Changing your mortgage deal, usually to get better terms
Repayment mortgage: Paying both interest and capital monthly
Interest-only mortgage: Paying just the interest monthly, with the capital repaid later