Interest only mortgages
The mortgage definition for Interest only mortgages:
With an interest-only mortgage, your monthly repayments to the lender consist only of interest on the total loan amount. The interest payments will vary depending on the interest rate being charged by the lender at the time. This type of mortgage involves paying the lowest possible monthly outlay to the lender, as no capital is included in the repayment. Instead of repaying the capital, regular payments are put aside in a suitable investment or savings plan. This grows cumulatively and assumptions are made regarding its growth in order to calculate a monthly repayment figure. If you are fortunate, the investment will accumulate at a higher rate than is required to pay back your loan on time, resulting in a cash surplus at the end of the term. This is not always the case however, and sometimes there can be a cash deficit at the end of the term.
Cashback mortgagesCashback mortgages
Cashback mortgages provide you with a single lump sum of cash immediately on completion of the mortgage transaction. The amount of the lump sum is usually calculated as a percentage of the overall loan amount, though it can be a set figure. The percentage of the loan that is given as cashback can be as high as 5%, though amounts in the region of 1 to 3% are more common. Various different types of rate can come with cashback - capped, discounted, fixed and variable. There are also a lot of mortgages that award you three or four hundred pounds to go towards your solicitor's fees. Although this is a form of cashback, it would generally be classed as an incentive and not specifically as a cashback mortgage.
Cooperative mortgagesCooperative mortgages
Any loans related to a cooperative residential project.
Tracker mortgagesTracker mortgages
They are usually linked to the Bank of England base rate, in that you pay a set margin above the current base rate level. Unlike many of the other types of rate, most tracker rates will not revert to the SVR at any point during the life of the loan. They will continue to track the base rate until you have either paid off your mortgage or switch provider or product. You can also get tracker mortgages that have discounts and stepped discounts built into them.
Further Suggestions Variable rate mortgages
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