What is a mortgage? A mortgage is a sum of money borrowed from a
bank or building society to purchase a property. This money is
paid back to the lender over a fixed period (mortgage term)
together with accrued interest. Monthly repayments consist of
part repayment of the capital amount borrowed together plus a
payment towards the accrued interest. The outstanding balance
will reduce over the mortgage term. Interest only mortgage With
this type of mortgage, each monthly payment is only used to pay
off interest, with the capital being paid off at the end of the
mortgage term. The borrower will need to satisfy the lender that
they have the means in place to pay off the capital when they
commence the mortgage. Typically, the borrower will commence a
saving plan to run in conjunction with the mortgage or
alternatively plan to sell the property at the end of the
mortgage term. Interest Rate Options Borrowers’ monthly payments
will increase or decrease as the lender adjusts the rate in line
with market conditions. S