Types of Mortgages

Types of Mortgages

Lenders have developed many different types of mortgages, which offer borrowers different ways to repay.

Repayment mortgage

Interest-only mortgages

There are various forms of ‘interest only' repayment plans. The monthly repayment consists only of interest. The capital is not repaid monthly, but by means of a savings plan of some sort. The most usual are:

Endowment mortgages

This form of mortgage has recently come under criticism because many plans were sold with generous forecasts. Unfortunately, policies haven't generated enough money to repay the mortgage.

Accelerator mortgages

Further Information

The Office of Fair Trading is a government body dedicated to protecting consumers' rights. Their web site has a section devoted to buying or selling a home.

Go to www.oft.gov.uk/Consumer — and look for the item "buying and selling your home".

For more information about mortgages and regulations go to Mortgages Laid Bare, created by the FSA.