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Mortgage Information
- Repayment/Annuity
- Interest only loans
- Offset Flexible Mortgages
Repayment / Annuity
This is the traditional mortgage where each monthly payment is split between paying Interest on the outstanding loan with the remainder being set against the capital balance. The loan will be re-paid if it runs full term.
Interest Only Loans
Interest only mortgages are those where the monthly repayment consists of just the interest being paid to the lender and no contribution is made to reduce the amount borrowed. Where ‘interest only’ loans come into their own is with ‘buy-to-lets’ or rental properties. By using this method of mortgage, one can keep repayments low in the initial years of the mortgage where usually the most problems will arise.
At some stage however, the capital must be repaid. Some of the methods by which the loan can be paid off are
- A pension Plan
- An investment plan
- Selling the property
- Switching back to an annuity plan
Offset Flexible Mortgage
The Offset Flexible Mortgage offers customers the opportunity to save mortgage interest and knock years off their mortgage, by lodging funds to their facility account (current account) and/or up to 3 Instant Access Savings accounts. The customer continues to have instant access to all their money on deposit. Offset Flexible Mortgage provides a greater financial benefit through reducing the customer’s mortgage interest cost and reducing the duration of their mortgage.
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