How does it work?

You borrow a lump sum over a fixed period of time (usually 25 years but can be shorter or longer). You pay the interest and some of the capital on a monthly basis to the lender.

ADVANTAGES:

1. Some flexibility with repayments.
2. The only way you can be 100% certain the loan will be repaid, providing repayments are maintained.

DISADVANTAGES:

1. Monthly mortgage payments may be higher than interest only mortgages covered by an investment/life assurance product to repay the capital.
2. Only a small amount of capital is paid off in the early years as the monthly mortgage payment consists of a higher proportion of interest to capital repayment.

Your home may be repossessed if you do not keep up repayments on your mortgage.

As Independent Mortgage advisers we always offer the option to pay for our services either via fees or commission. Where the commission option is chosen you will not be asked to pay any fee to us unless the best lender is one of the few who do not offer introducer fees to brokers. In such circumstances where the lack of broker commission results in your having to pay a fee - or where you choose to do so to help reduce your overall mortgage costs - we typically charge 0.35% of the loan amount. On a loan of £100,000 this would mean that you may be charged a fee of £350. A minimum fee of £250 will apply. Fees become due upon completion but will be chargeable, and thus invoicable, upon receipt of an offer. You will receive written confirmation of any such chargeable fee before proceeding.