What Are ISA Mortgages?

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How Much Can I Afford?: You have to be very careful when buying a house to be sure that you will be able to afford the monthly mortgage repayments – as you risk losing your home completely if you find you simply cannot afford it.
What Is A Mortgage Indemnity Guarantee (MIG) And Will I Have To Pay It?: The Mortgage Indemnity Guarantee is also known as a Mortgage Indemnity Premium or High Lending Fee. It protects the lender against the risk of you defaulting on your mortgage debt.
Cashback Mortgages: 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 Capped Rate Mortgages?: A capped rate mortgage puts a limit on maximum interest payable on your mortgage over a predetermined period. If the mortgage rate is BELOW the cap the borrow will enjoy the lower interest rate available.
What Happens If I Have Bank Defaults?: If you have failed to meet payments on a credit agreement such as secured loans, unsecured/personal loans, credit cards, store cards or car finances etc, or you have failed to comply with your lender’s requirements, you will be described as having 'defaulted'.

If you take out an intrest only mortgage your lender will expect you to put in place a ‘financial vehicle’ capable of repaying your mortgage at the end of the mortgage term. There are several suitable vehicles in today’s market and these include endowments, pensions, and also ISAs.

Every month, with an ISA mortgage you will be expected to pay the interest on the loan, you then take out the ISA to build up a fund which will pay back your mortgage at the end of your mortgage term.
ISAs are the most flexible investment vehicle available in today’s market, you can’t stop paying into an endowment and start again, because you will be liable for penalty charges or may lose money to charges. With a pension mortgage, you can't access any of the fund until you are at least 50 years old so repayment of the loan is impossible till after this time. With ISAs, you can stop paying into them and start again with little or no penalty charges.

Note, taking out any form of interest only mortgage is far riskier than taking out more traditional types such as repayment mortgages. No type of investment is 100% secure and you could, potentially find your savings to be insufficient at the end of your mortgage term.

The advantage of the ISA mortgage is that you get tax breaks on the income invested in them, which makes them a more tax efficient vehicle than a endowment. Should your investment grow fast you may be able to pay off before the end of your mortgage term. The flexibility is also a good thing, as you can stop and start contributions at any time.

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