Mortgages

Home loans are generally referred to as Mortgages. These tend to be long term loans that are an altogether different type of borrowing facility compared with personal loans and credit cards.

There are lots of different types of mortgages to suit all requirements. Perhaps the most well known type of mortgage is the straightforward repayment mortgage. Other mortgage types include interest only mortgages; tracker mortgages; fixed rate mortgages; variable rate mortgages and buy-to-let mortgages. This list is not exhaustive and specialist lenders may well offer all sorts of different type of mortgage.

With a repayment mortgage the borrower pays back the capital balance and the accrued interest over an agreed period of time. The monthly repayments on interest only mortgages are a lot cheaper as the borrower is only paying off the interest as the name suggests. However, the capital still needs to somehow be repaid at the end of the mortgage term.

With the exception of buy-to-let mortgages, all the other types of mortgages mentioned are to do with the choice of interest rate a mortgage lender offers. These have come into being as lenders try to attract custom by offering a range of special deals by fixing or adjusting interest rates to suit individual customer circumstances.

Buy-to-let mortgages have been designed for people who wish to buy another property with the intention of letting it out to other people. This is generally done as an investment, especially when house prices are booming, as the borrower is getting income from rent while the equity in the property grows.

Taking out a remortgage is an option for those who want to utilise the equity in their property to use for any number of purposes such as home improvement, debt consolidation, financing a special occasion or holiday, buying a car etc. The repayment of the remortgage is generally spread across the remaining term of the mortgage.