17/10/2024
🏡 Mortgage Jargon Buster 🛠️ – Simplifying the Terms!
When it comes to mortgages, it’s easy to get lost in the jargon. Here are some key terms explained in plain English, so you can feel more confident about your mortgage options:
Loan-to-Value (LTV)
This is the percentage of the property’s value that you’re borrowing. For example, if your property is worth £200,000 and your mortgage is £150,000, your LTV is 75%. A lower LTV often means better mortgage rates.
Fixed-Rate Mortgage
With this type of mortgage, your interest rate stays the same for a set period (usually 2, 5, or 10 years), meaning your monthly payments remain consistent.
Standard Variable Rate (SVR)
This is your lender’s basic interest rate, which can go up or down depending on the wider economy. It often applies once your fixed or introductory rate ends.
Remortgaging
This means switching your current mortgage deal, either with your existing lender or a new one, often to get a better rate or borrow more.
Capital Repayment Mortgage
Each monthly payment you make goes towards repaying both the loan (capital) and the interest. By the end of the term, you’ll have fully repaid the mortgage.
Interest-Only Mortgage
You only pay the interest on the loan each month, so the original loan amount (capital) stays the same until the end of the mortgage term, when you’ll need to repay it in full.
💡 Still confused? Drop us a message or give us a call, and we’ll happily explain anything further!
🔔 Your home may be repossessed if you do not keep up repayments on your mortgage.
