Moneyextra.com Dictionary
Moneyextra.com - Dictionary
Interest Only Mortgages
An interest only mortgage is a loan on which you pay no more than the interest charged. In effect you are merely servicing the debt not reducing it. The amount you owe remains constant.
If you have an interest only mortgage the onus is on you to arrange how to repay the capital at the end of the mortgage term. Most borrowers with these types of loan take out some kind of long-term savings plan such as an endowment policy or Individual Savings Account.
See also our latest. Mortgage rates
Moneyextra.com recommends you take independent financial advice before acting on any article
Back
2009-02-17 00:00:00 © Moneyextra.com
Treating Customers Fairly
Dictionary
- Fee Based Independent Financial Advisors IFAs
- Approved Pension Schemes
- Taxation of Dividend Income
- Non-Contributory Pension
- State Earning Related Pension Scheme SERPS
- Funded unapproved pension schemes FURBS
- Personal Allowance
- Pay-As-You-Earn PAYE
- Consumer Price Index CPI
- Market maker