01908 597655It’s been an eventful few weeks in the mortgage world, with Rishi Sunak’s announcement of the Budget 2021, mortgage rates on the rise and inflation increases all dominating the financial press.
So, what does all this mean for our Mortgage Light customers? We’re here to explain all. [Read more…]
Most mortgages these days are standard capital and interest repayment mortgages, also known as ‘repayment mortgages’. This means that each month you repay all of the interest charged on your borrowing for the month, plus a small amount of the capital that you originally borrowed.
Over the term of your loan, you will eventually repay all of the capital you borrowed via your monthly repayments so that your loan is fully paid off. The interest that you pay each month is effectively the fee you pay to your lender in return for borrowing the capital from them. It is how lenders make their profit. [Read more…]
If you have a standard repayment mortgage, you may be able to reduce your monthly payments by extending your mortgage term. Your mortgage term is the length of time that you have agreed to fully repay your mortgage within. The term will have been agreed with you at the time you originally took your mortgage out, or last remortgaged it.
For a long time, a 25-year mortgage term was the standard go-to option. In recent years, however, as the size of the average mortgage has increased, there has been a move towards longer repayment terms in an attempt to make the higher borrowing needed to buy a property more affordable. In fact, data suggests that the number of first-time buyers opting for a mortgage term of between 35 and 40 years has doubled over the past decade.
So, how does extending your mortgage term affect your payments, and is it something you should consider?
A fixed-rate mortgage is a mortgage product where the fixed interest rate is guaranteed to stay the same for an agreed fixed period. It pretty much does what it says on the tin! Unlike with a variable rate style mortgage, you’ll know exactly how much you’ll need to repay each month during the agreed fixed period. [Read more…]