UK 2026 Budget: Employee National Insurance Cut to 6% - What Workers, Savers, and Buyers Should Know

Fixed-rate loans lock the interest rate for the full term (15, 25, 30 years in most markets). Variable rates (tracker, ARM, floating) move with a benchmark like SOFR, Bank Rate, or the bank's MCLR/EBLR. Fixed is right when you want predictability or expect rates to rise; variable is right when you expect rates to fall or stay flat.

The conservative rule: total housing cost (PITI + HOA) should be at most 28% of gross monthly income. Total debt service (housing + auto + student + minimum credit card) at most 36-43% of gross. On $100,000 gross income, that's roughly $2,300/month housing - supporting a $350,000-400,000 mortgage at current rates.

A 15-year mortgage typically has a 0.5-0.75 percentage point lower rate but a 30-50% higher monthly payment than 30-year. Total interest paid over the life of the loan is about one-third as much. The 15-year is mathematically optimal IF you can comfortably afford the higher payment without crowding out retirement savings or emergency fund.

Lenders charge mortgage insurance when your down payment is less than 20% of the purchase price. Cost: 0.5-1.5% of loan balance per year ($80-300/month on a $300k loan). Cancels automatically at 78% loan-to-value. To avoid: put 20% down, use a piggyback 80-10-10 loan, or use VA loans (if eligible).

PITI = Principal + Interest + Taxes + Insurance. The four core components of a US-style mortgage monthly payment. Principal and interest come from the amortisation schedule. Property taxes and homeowners insurance are usually escrowed monthly into the lender's account.

In the early years of a mortgage, almost all of the monthly payment goes to interest; almost none to principal. The split shifts gradually over the loan term so that by year 20-22 of a 30-year mortgage, most of each payment is principal. This means extra payments early in the loan have a much bigger impact than extra payments late.

US: itemised deduction available on the first $750,000 of mortgage principal (post-TCJA limit). Only valuable if your total itemised deductions exceed the standard deduction. UK: no mortgage interest relief on owner-occupied homes. India: Section 24(b) allows Rs 2 lakh deduction on self-occupied home loan interest under the old regime.

Refinance when the new rate is at least 0.5-0.75 percentage points below your current rate AND you'll stay in the home long enough to recoup closing costs (typically 24-48 months). Cash-out refinances let you pull equity out as cash but reset the amortisation clock.

Initially the hard inquiry drops your score 5-10 points. Once the mortgage shows on your credit report, on-time payments improve your score over 6-12 months. The age of credit, mix of credit, and lower revolving utilisation (because the mortgage is installment debt, not revolving) all help.

Common in the UK and Australia. An offset mortgage links your savings account to your mortgage so the savings balance reduces the interest charged on the mortgage. You don't earn interest on the savings, but you save mortgage interest at the (usually higher) mortgage rate. Tax-efficient because the savings benefit is not taxable as interest income.

Most floating-rate home loans in India are now linked to EBLR (External Benchmark Lending Rate) tied to the RBI repo rate. Loans before October 2019 are typically MCLR-based. EBLR-linked loans reprice within 1-3 months of an RBI repo rate change.

First step: contact the lender. Most offer forbearance, payment deferral, or loan modification in genuine hardship cases. Missing payments trigger late fees (within 15 days), credit score damage (after 30 days), default notice (after 60-90 days), and foreclosure proceedings (after 120+ days).