What is a mortgage?
A mortgage is a loan usually given by banks or building societies that will be used to cover the cost of the property and is repaid back through monthly instalments. It is a common method in taking ownership of a property. In the usual circumstance, a deposit will be put down (10% for Corinthian Homes) and the rest can be covered via a mortgage.
How much could I borrow?
The borrowing amount would be dependable on your income, financial situation and financial history. A mortgage advisor can advise and go through all the necessary details with you. Many banks also offer an online mortgage borrowing calculator. This may be helpful to you as well. The larger the deposit paid at reservation, the smaller the loan that you take out / pay back and vice versa.
How much would I pay back?
When paying off your mortgage, you will pay back two aspects; the actual loan you received (regarded as Capital) and the interest that comes with this. The more of the mortgage you pay off, the lower your interest repayments will be. Alongside the borrowing calculator, banks also provide a mortgage repayment calculator for you to gain further insight.
Mortgage repayments can fall into any of the following categories;
Fixed Mortgage Rates – This is where the amount you pay back each month including interest will remain the same for a set period of time and will not fluctuate hence the name ‘fixed’.
Variable Rate Mortgages - these allow fluctuation on the level of interest you pay each month.
Tracker Rate Mortgages – are similar to the Variable Rate Mortgage. However, what separates the two is that a tracker mortgage will ‘track’ another rates movement and adjust to this. The rate will usually correlate with the Bank of England Base Rate, with a potential plus or minus percentage of this.