Types of Mortgages

Types of Mortgages

There are generally 3 basic mortgage choices;

1) Repayment 2) Interest Only 3) A mix of the two, part Repayment & part Interest Only

The most popular type of mortgage is the Repayment, this ensures that at the end of the term the loan will be fully repaid as long as all repayments have been met.

Since the credit crisis, Interest Only mortgages are less readily available. An interest only mortgage means that during the term of the mortgage, payments made consist of purely interest on the money borrowed and so at the end of the term, the whole amount of the original mortgage will still be outstanding. With this type of mortgage, it will be necessary to have a repayment plan in place to ensure that the debt will be repaid in full at the end of the mortgage term.

With a part repayment and part interest only mortgages, these are a combination of the two above.

There are then different options to to what type of mortgage deal can be entered into Fixed, Discount, Tracker, Capped Standard Variable Rate, as well as how long you want to enter into a ‘deal’ for.

 

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