Hot Topics
- Can I Take A Break From Making My Mortgage Repayments?
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The ability to take a break from mortgage repayments is a feature of the Flexible, Current Account and Offset mortgages.
- What If I Die Before My Mortgage Is Paid Off?
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If you die before your mortgage has been repaid, your estate will face the cost of paying back the outstanding balance. The mortgage will not be written off by the lender, it will have to be paid by the next of kin.
- What Are Redemption Penalties?
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Redemption penalties are your lender’s way of getting extra money out of you when you decide to cancel your mortgage agreement early.
- Cashback Mortgages
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Cashback Mortgages provide you with a lump sum of cash upon completion of the property purchase, either as a percentage of the mortgage or a fixed sum.
- What are Variable Rate Mortgages?
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A variable rate mortgage is when you pay a standard variable rate (SVR) that changes in line with the Bank of England's base rate. The SVR is usually between 2% and 4% higher than the Bank of England's base rate, but this will vary from lender to lender.
How Is Interest Calculated On a Mortgage?
Interest is charged in different ways depending on what kind of mortgage you have.
With many modern mortgages where you have the opportunity to make payments at any time, your interest will be calculated on a daily basis. This generally means that your interest will be charged on the balance outstanding at the end of each day so you can benefit immediately from any payments of capital. It also means, however, that if you miss a payment or are late with payments, more interest will be charged. You will also be charged interest on any unpaid fees or premiums.
There are also many mortgages where the interest is worked out once a year, these are called 'annual interest' or 'annual rest' loans.
Mortgages which calculate your interest on a daily basis offer you a better deal because they instantly reflect your payments, reducing your total interest bill.
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