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Customers should also carefully consider what type of mortgage agreement they will be best suited to. Broadly speaking, there are two different types of repayment plan available to customers, the following is a brief explanation of each:
Interest Only Mortgages
Using this type of mortgage agreement, the customer will only be expected to repay the interest on their mortgage on a regular basis, which can make budgeting for repayments that much easier.
Although this may appear highly beneficial , it is also important to remember that the initial loan will need to be repaid in full once the agreement has ended. Customers will be expected to put money in a suitable investment vehicle during the course of their mortgage so this money can be repaid.
Repayment mortgages are considered to be more straightforward and generally more widely used by customers. By taking this option, the customer will be expected to gradually repay both the initial loan plus interest, on a regular basis until the entire amount has been repaid.
Although this may make monthly repayments more expensive to begin with, the customer is generally guaranteed to own the property outright once the mortgage period has ended.
Interest Rate Deals
There are also several different types of interest rate deal that should be considered as part of the customer’s mortgage calculations. The following are some examples:
- Fixed rate mortgages
- Tracker mortgages
- Offset mortgages
Making mortgage calculations with an online calculator offers the following benefits:
- You are forewarned as to the possible finances involved in a mortgage of the size you are seeking, so that you enter any negotiations for mortgages with a more informed viewpoint.
- You can see whether the calculated payments match up to what you are willing to pay, or whether it might be worth looking at a different size of loan, interest rates or length of repayment to better suit your needs.