Mortgage Glossary
There is a lot of ‘jargon’ used in the mortgage industry.
We have tried to provide you with a comprehensive explanation of all the terminology that you may come across during the mortgage process
Interest Only
There are two types of mortgage, interest only or capital repayment. With an interest only mortgage the balance of your mortgage stays the same throughout the mortgage term.
Interest and sometimes a premium in a suitable investment vehicle are paid monthly. At the end of the term, the proceeds from the investment are intended to repay the mortgage. This amount will depend on the performance of the investment vehicle.
If you do choose an interest only mortgage you are responsible for ensuring that you have sufficient funds available to repay your mortgage at the end of the term.
Interest Charges
These are the charges made on a loan, calculated as a percentage of the total amount that you borrowed on your mortgage.