Repayment mortgages - Each monthly payment pays off a little of the original debt, as well as interest on the loan. At the end of the term the mortgage is cleared.
Interest only mortgages - With this type of mortgage, you pay-off the interest on the loan but not the capital. At the end of the mortgage term you are expected to repay the capital.
Endowment mortgages - You use an endowment policy to provide life insurance and save funds to repay the loan at the end of the term (usually 20-25 years).
Variable rates - The mortgage rate changes every time interest rates change or, in most cases, the overall effect of any interest rate changes is calculated once a year and payments are altered accordingly. Whatever kind of mortgage you start with, it is likely to change to variable rates at some point.
Fixed rates - The interest rate is fixed for the period agreed - often two to five years. These are ideal for budgeting or if you think rates might increase. You do not benefit if rates fall, and will face penalties if you try to move to another provider.
- A remortgage is exactly what it says; it is basically repeating the mortgage
process and obtaining a new mortgage. It is not an additional mortgage on the
property that is added to the original mortgage. A remortgage involves obtaining
a loan to pay off the debt on the first mortgage leaving a new "remortgage"
as the loan on the property.
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Finance 23 Ltd is authorised and regulated by the Financial Services Authority.
We are on the FSA Register No 497616 at http://www.fsa.gov.uk/register/home.do
The Financial Services Authority does not regulate some aspects of commercial
and buy to let mortgages.