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What is a mortgage?
Main methods of repaying a mortgage
Repayment (Capital & Interest)
With this method your monthly repayments will consist of both interest and capital so that over time the amount you owe will decrease. The capital will reduce slowly in the first few years as the repayments will be mainly interest. This type of methods ensures that the mortgage is completely repaid at the end of the term.
With this method you only repay the interest on the amount borrowed. The capital will still remain at the end of the term. With this method you will need to take out an investment policy to ensure you can repay the capital at the end of the term. Using ISAs and pensions are a good way to take advantage of the tax breaks offered by these products and build up a sufficient sum to cover the capital.
Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage.
Equity Release will reduce the value of your estate and can affect your eligibility for means tested benefits.
The value of pensions and the income they produce may fall as well as rise. You may get back less than you invested.
With more and more products and lenders available it’s more important than ever to ensure you get the best product suited to your needs. At Town & Country Financial Advisers we can provide you with the best advice, not only to find you the very best mortgage provider, but also to provide a review service to monitor and change your mortgage if need be.
The Financial Conduct Authority do not regulate buy to let mortgages and commercial mortgages.