1. The above figures assume an annual reset type mortgage which recalculates mortgage payments once a year. as such they may overstate the monthy payments for more flexible mortgages, offering monthly or even daily recalculations of payments.For a true comparrison please always refer to a KFI issued by the intermediary or lender.
2. A repayment mortgage is one where mortgage payments cover both interest costs and repayment of the original loan, so that the mortgage amount decreases over time. An interest only mortgage is one where mortgage payments only cover interest costs. with interest only loans, the mortgage amount does not automatically decrease over time. Frequently borrowers will set up an ISA,endowment or some other investment product (at additional cost), designed to repay the loan at the end of the term.
