Money Matters (Financial) Ltd

Money Matters (Financial) Ltd
102 High Street
Uckfield
TN22 1PX

Tel: 01825 744140
Fax: 01825 744142
email


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Interest only

Don't you mean endowment mortgage?

For many people, interest only mortgages are called 'endowment mortgages' or even 'pension mortgages', but strictly speaking these names describe an interest only mortgage plus the method by which it is repaid. In other words, an endowment mortgage is an interest only loan that is repaid by the proceeds of an endowment policy etc.

How they Work

An interest only mortgage is where the lender (a bank or building society usually) only charges you interest on the loan you've agreed. You don't pay the capital back until the end of the mortgage. The lender will usually ask you at the outset, to provide an investment plan of one type or another to repay the loan at the end of the term, such as an endowment policy or ISA savings plan, but sometimes they will leave the repayment plan entirely up to you.

Every month, you then pay this interest to the lender for the duration of the loan. The lender calculates your monthly repayments depending upon how the rate you have chosen is set. At the end of the loan period, the lender will expect the initial capital they lend you to be repaid in full by whatever means you have arranged.

Your home may be repossessed if you do not keep up repayments on your mortgage.


Money Matters (Financial) Ltd is authorised and regulated by the Financial Services Authority.
Money Matters (Financial) Ltd. is entered on the FSA register (www.fsa.gov.uk/register) under reference 437886.
102 High Street, Uckfield, East Sussex, TN22 1PX
Tel: 01825 744140 Fax: 01825 744142
Registered in England 3397856