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Repayment Mortgage
With a repayment mortgage, or as it is sometimes called,
an annuity mortgage, your monthly repayments cover the
interest being charged and a portion of the loan itself.
In the early years your repayments are mostly interest,
with a smaller amount being paid against the loan
balance.
Over time as your loan
gets smaller, this ratio changes and you begin to pay
more and more off the loan itself until it's finally
paid at the end of the term.
Endowment Mortgage
Here repayments are made to cover only the interest
element of the mortgage. At the same time separate
payments are made into an endowment policy. At the end
of the mortgage term the proceeds of the endowment
policy are used to pay off your mortgage.
It is important to note
that there is no guarantee that the proceeds of the
endowment policy will be sufficient to repay the loan in
full at the end of the term.
It is a good idea to
keep in contact with your endowment provider to make
sure your policy is on track.
Pension Mortgage
With a pension mortgage repayments are made to cover
only the interest element of the mortgage.
At the same time
separate payments are made into a personal pension
plan. At the end of the mortgage term the proceeds of
the pension plan pay off the mortgage.
The surplus provides
you with retirement benefits. Certain conditions apply
to a pension mortgage, which your mortgage consultant
can explain.
Interest Only
Mortgage
With this repayment method you have the option to just
repay the interest each month, thus giving you a lower
mortgage payment and manage your cash flow a lot easier
and at the same time maximizing your tax relief.
When the property is
eventually sold and provided it has made a profit you
then repay the capital from the proceeds of the sale.
Normally only used by investors.
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Rate Options
Variable Rate
With a variable rate your monthly repayments may rise or
fall from time to time in line with general market
interest rates.
If the rates fall your
monthly repayments falls, but if rates rise you pay
more.
We can also offer you a
discount off our standard variable rate for the first 12
months of your mortgage. Ask your mortgage consultant
for more information.
Split Rate
With a split rate you set part of your mortgage at a
fixed rate and the remainder at a variable rate.
If rates fall you pay
less each month on the variable portion of your
mortgage.
If the rates rise you
have the comfort of knowing that only the variable
portion is affected.
Fixed Rate
Choosing a fixed rate means that your monthly repayments
will not change for the duration of the fixed rate
period you have chooses. You can choose fixed rate
periods of 1, 2, 3, 4, 5, and 10 years.
Many people choose
fixed rates in order to give them security of knowing
exactly what their monthly repayments will be for some
time ahead.
When a fixed rate
period comes to an end, you can choose another fixed
rate or change to a current variable rate.
Tracker Rate
A tracker mortgage is a repayment mortgage with an added
commitment from the lending institution that the
interest rate will not move more than a certain
percentage above the European bank base rate.
Generally, this product
is highly recommended as it is transparent and good
value for money. |
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4277037