What is a ‘Mortgage’?
A mortgage is a loan secured on your home.
How does this work? You borrow a sum of money – the capital – which you either pay back on a monthly basis over a set period of time (the term) or the whole amount at the end of the term.
During the term you also pay interest to the lender. The amount paid is calculated on the capital sum borrowed and is usually expressed in percentage terms e.g. A 4.49% means that you would pay £4,490 in interest per year on a £100,000 mortgage loan.
The ‘Repaying your mortgage’ section below explains this further.
As the mortgage is secured against your home it is important to protect yourself and your home against the unexpected. In the event of you being unable to keep up your loan repayments, the lender can repossess your home. We cannot predict the future for you but we can help give you peace of mind. The section ‘Insurance for you and your home’ gives you more information but ask your adviser for advice on appropriate products for you and your home.
