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There remains two main methods of repaying a mortgage loan, and it is possible to set up the mortgage on a 'part repayment and part interest only' basis. A description of these methods is provided below.
Repayment (capital and interest) mortgages
Under a repayment mortgage your monthly repayments consist of both interest and capital hence, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly in the early years.
Whilst this method ensures that the mortgage is repaid at the end of the term providing all payments are made on time and in full, it is generally more expensive at the start.
Interest only mortgages
As their name suggests, with an interest only mortgage you only repay the interest on the mortgage. At the end of the term the capital is still outstanding. Therefore you will usually need to take out some kind of investment policy to save up enough money to repay the mortgage at the end of the term.
Traditionally the preferred product for repaying the capital of an interest only mortgage was a mortgage endowment policy (which included a set amount of life cover) – although more recently customers are using Individual Savings Accounts (ISAs) and pensions to build up a sufficient sum and taking advantage of the tax breaks offered by these products.
We also arrange:
Ex pat mortgages
Let to buy mortgages
Buy to let mortgages
The financial services authority does not regulate some forms of mortgages.
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for Mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £495, we will also receive commission from the lender.
As we are independent you have the choice whether to pay a fee for the mortgage advice we provide, typically 1% of the mortgage amount, if you chose this option, any commission received from the lender will be passed to you.