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Leeds Mortgage Expert : Mortgages : Mortgage Types
Types of MortgagesThere are two main types of mortgage. These are repayment mortgages and interest only mortgages. There are several different ways of repaying interest only mortgages, and so interest only mortgages have several different options available including different investment options to pay off the mortgage. The savings made can differ substantially between the different types of mortgages and between the different lenders. Repayment MortgageIn terms of variations of repayment mortgages, the main ones are tracker mortgages and cashback mortgages. The payments you make to the lender every month pay off both the capital and the interest from the mortgage. Provided you keep up the payments, you are guaranteed to pay off the loan by the end of the term agreed (usually between 25 years). You usually pay off more interest at the start of the mortgage term and then gradually more of the capital debt. Therefore, in later years, you will be repaying increasing amounts of capital and reducing amounts of interest. It may seem as if this is costing more but that's because unlike the other types of mortgages you're paying off the capital and not just the interest. For more information on Repayment Mortgage variations look at: Interest-Only MortgageThere are many variations of Interest-Only mortgages including Fixed Rate mortgages, Variable rate mortgages, Capped rate mortgages and Discounted rate mortgages. An interest-only mortgage is where the lender only charges you interest on the loan you've agreed. You don't pay the capital back until the end of the mortgage term agreed. The idea of this mortgage is that you pay the interest owed to the lender and save the capital repayments by investing them elsewhere. At the end of the mortgage term you will have hopefully made enough money from investments to pay the lump capital sum. This way you can possibly make a saving by investing capital that would otherwise be paid straight back to the mortgage lender. For more information on Interest-Only Mortgage variations look at: If you want any more information about mortgages, please feel free to contact us - we will be more than happy to help. Alternatively, why not use our Mortgage Review system to find your perfect mortgage?
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