Interest
only mortgages
Traditionally interest only mortgage facilities
were only available in respect of investment property purchases.
In an interest only facility, as the name suggests, only interest
is paid to the lender with the capital balance staying constant.
In the past two years a number of lenders have made such facilities
available in respect of home loan, although there are usually
a number of conditions attached to the facility. One lender will
offer first time buyers interest only facilities up to a maximum
of three years with the underlying thinking being that it gives
first time buyers a chance to get on their feet. Most lenders
are happier offering these products to high income earners and
will generally impose a review of the interest only facilities
every five years.
Re-mortgages
If you're tired of paying exorbitant interest
on your credit cards and unsecured debt, it may be time to take
advantage of a home equity loan, either with your existing lender
or with a lender offering a more competitive product.
If
you need to consolidate debt or are just looking for smarter financing
of upcoming projects, a home equity release can satisfy your obligations,
lower your payments and provide you tax savings as well. Please
visit our re mortgage section for further information.
| Warning: Purchasing this product may negatively impact on your ability to fund future. |
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Second Mortgages are also a smart source of funding for a myriad
of uses, from second homes to home improvement. We can help you
combine the financial power of your equity with the benefit of
tax savings to supply you with the cash you need to achieve your
personal goals.
Annuity
mortgage
The repayment/annuity mortgage is the most common
one. Each month the borrower repays both monthly interest and
a portion of the loan amount. Repayments in the early years of
the mortgage are mainly comprised of interest. The balance of
the mortgage loan owed decreases as the period progresses, until
the loan is fully paid at the end of the mortgage term. The results
section of our mortgage repayment calculator gives a split between
the capital and interest element of your mortgage.
Endowment mortgage
The product is an interest only mortgage that
is supported by an investment or endowment policy. The borrower
pays only interest during the term of the mortgage and the loan
amount remains outstanding until the end of the term. Premium
payments are payable on the investment / endowment policy during
the term. The endowment policy is similar to a life assurance
investment / savings policy that is designed to provide an amount
to repay the mortgage at the end of the term.
Current
account mortgage
By combining your current account with your mortgage
account all money that would normally be lodged into your current
account will be taken off your mortgage meaning that you could
pay off your mortgage years ahead of your expected date by simply
reducing the capital amount. First Active, one of our lenders,
were the first Bank to introduce the current account mortgage.
The current account mortgage is a variable rate product and does
not facilitate fixing your rates.
Our consultants would be happy to explain the
workings of this innovative and highly competitive Mortgage product.
Pension mortgage
Pension mortgages are similar to investment/endowment
interest-only mortgages. A pension plan supports the mortgage
instead of an endowment policy. The product is generally only
available to the self-employed or persons in non-pensionable employment,
or Company Directors.
The lump-sum portion of a pension plan is used
to repay the mortgage principal at mortgage maturity, timed to
coincide with retirement.
The borrower has the unique advantage of gaining dual tax relief
at the highest tax rate on the pension premiums, which are all
the "capital" repayments, and also gaining maximum tax
relief on the mortgage interest.
This can be the most tax efficient mortgage method
for suitable borrowers. |
