Many borrowers don’t understand the full importance of the ESIS sheet and its role in the mortgage process. This isn’t something you would know, so don’t worry. We can help guide you in understanding what an ESIS is and what to look for on one. If you are after a quick answer, please visit our FAQ page here: What does ESIS mean?
ESIS
ESIS stands for European Standardised Information Sheet. It is an official document that a lender will give you when you are considering a mortgage. This is what it sets out and explains:
- Key features
- Fees
- Risks of a specific mortgage product
It is essentially a document that sets out exactly what the potential mortgage would look like, so you have all the information needed to make an informed decision on whether you would like to proceed with the product.
Why does an ESIS matter
- They make it very easy to compare mortgage options for your situation, and you can clearly see all the information laid out point by point.
- It gives you full transparency on costs, including fees that may not be obvious from the headline rates.
- It highlights the risks of the mortgage product.
- It helps the borrower understand what the monthly payments will look like if they move forward with the mortgage product.
What to look for on your ESIS
Now that you know what the ESIS is and its importance in the mortgage process, let’s look at the things you should check in your ESIS form.
The interest rate
This section shows whether the rate is fixed, variable or a tracker. If it is fixed, the document will specify the duration of the fixed period. If the product has a variable rate, the rate can change. This is considered one of the most important parts of the form, as it highlights to the borrower what the monthly payments will look like.
The overall cost of the mortgage
The ESIS will show you the total amount you are agreeing to pay back to the lender, including the loan amount, the interest and any fees added to the product.
Your monthly payments
The ESIS will show your estimated monthly payments at different points in your mortgage deal. First, it shows what you can expect to pay each month during your fixed rate period. It then shows what your payments could look like once that fixed rate ends, when your mortgage moves onto the lender’s standard variable rate. It’s important to note that projected rates will be based on the lender's current standard variable rate, which may change.
Early repayment charge
The ESIS will let you know if your mortgage deal has a tie-in period and a charge for paying it off early. This is helpful when you are comparing multiple mortgage products, as an ESIS provides a single overall figure.
How to use your ESIS
Many people receive an ESIS form and are unsure of its purpose. The form is intended to help you understand and compare different mortgage options.
• Compare the interest rate, fees and total cost with any other options you are considering.
• Make sure you understand when your rate will change and what it might change to.
• Check whether the fees listed align with your budget.
• Look at the early repayment charges and make sure they fit your plans.
• Ask your broker to explain anything that is not clear or feels confusing to you.
Final thoughts
Your ESIS is there to give you clarity and confidence in your mortgage choice. By focusing on the interest rate, fees, monthly payments and any early repayment charges, you can quickly see whether a product is right for you. Our advisers at Hello Mortgage will always take the time to run through the ESIS with you to ensure you fully understand it. If you want help reviewing your ESIS or comparing your options, speak to our team today and get expert guidance in minutes.
Email: hello@hellomortgage.co.uk
Phone: 0800 292 2557
Image
Gallery.
