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"The Easy Way to Get Your Best UK Mortgage" |
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The
interest
is the amount the mortgage
lender
charges for lending you the money and it's one of the main
ways it makes its profits.
The lower the interest rate, the less money you have to pay
back over the mortgage
term.
Lenders boost their profits still further by charging a range
of fees
to set up and operate your loan, and it's important to take
these into account too when you're choosing a deal.
A sneaky trick lenders play
• When lenders offer especially attractive low
rates of interest, they are rarely as good as they
seem, because there are often high fees attached.
• Conversely, deals with low fees (or
even no fees) often come with relatively high rates
of interest.
As a borrower, the trick is to find a deal that
strikes a good balance.
To do that, you need to know
How to understand interest rates
Interest is charged as an annual percentage of the amount
you originally borrowed.
In other words, if you borrowed £100,000 at an interest rate
of 6 per cent for a year, you would have to pay £6,000 interest.
Lenders often call this the APR
or annual
percentage rate.
The interest rate can be:
• variable,
• fixed,
or
• capped.
How to understand fees
Lenders are extremely ingenious when it comes to thinking
up new ways to make money. Here are some to look out for:
• Set-up
fee. This may also be called an arrangement
or reservation
fee.
• Higher-lending
fee. This can also be called an indemnity
guarantee, additional
security fee or mortgage
advance premium.
• Early
redemption penalty.
• Exit
fee. Also called a deeds
fee, discharge
fee, redemption
or sealing
fee.
To find out what all these are for and whether
you need to pay them, read What
are all these fees for?
You may also want to read about the difference between
interest-only
and repayment
mortgages.
you'll probably also want to read How
to really find a good mortgage deal
To read more on this subject please see the list below or your mortgage guide or your home buying guide
Read enough? Just want a quote? To get your best mortgage quote quickly and easily we can put you in contact with a recommended mortgage adviser. It's free, completely confidential and there's no obligation at all. Simply fill out the form below
See the Latest Best Buy UK Mortgages
What
is a mortgage?
A basic summary of the
rules
The
choices you need to make
How much can
you borrow?
How do you prove
your income?
How long are mortgages
usually for?
What will happen to interest rates?
How
to Choose your Mortgage
Types of Mortgage
Remortgages
Where to Find Your Mortgage
Getting a Mortgage in Principle
Guide to Buying a Home in the UK
Guide to UK Home and Mortgage Insurance
Read more about Mortgage Basics
See contents of Full Mortgages Guide
See contents of Home Buyers Guide
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Mortgage
Basics
How
to Choose your Mortgage
Types of Mortgage
Where to Find Your Mortgage
Getting a Mortgage in Principle