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Repayment Method

With a capital and interest mortgage your monthly repayments are used to pay off the amount borrowed and the accrued interest. Endowment, ISA and pension mortgages are interest only. This means your monthly repayment is used to pay off the interest while an alternative repayment vehicle (Endowment/ISA/Pension) is taken out to build up a lump sum to repay the amount borrowed at the end of the term.

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Mortgage Types

Offset - A method of money management whereby the credit balances held in your current and/or savings accounts can be used to reduce the amount of the mortgage on which interest is charged. This can potentially reduce the total amount of interest paid and allow the mortgage to be repaid more quickly.

Discounted - An interest rate set at an amount 'discounted' below the lender's standard rate. This will only apply for a set period.

Fixed - The mortgage repayments and interest rates are fixed from the start of the mortgage. The interest rate will remain the same regardless of the movement in interest rates.

Capped - A capped rate mortgage is a variable rate mortgage, which is capped to ensure the rate does not exceed a certain limit.

Tracker - The interest rate follows the market rate (for example, Bank of England Base Rate or LIBOR) plus or minus a certain margin.

Variable - The mortgage repayments and interest rates may increase or decrease throughout the term of the mortgage depending on the market rate (for example, Bank of England Base Rate or LIBOR).

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True Cost

To calculate the True Cost our sourcing system adds up the monthly payments due over the period, any costs which you have to pay at the outset of the mortgage, such as Valuations and Booking Fees, and deducts any benefits such as cash-backs to give the total figure.

If you require additional clarification of how the 'true cost' of a mortgage is calculated and want the best deal for you, click here to ask our friendly financial team to call you back.

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Annual income before tax

Your annual income is factored into your search to help return only the products you qualify for, based on the amount you wish to borrow i.e. your capacity to repay the loan. It is important to enter this information as accurately as possible as you will be asked to prove your income should you decide to proceed with your application.

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