Mortgage

A mortgage is a loan you take out from a mortgage lender to help pay for a property.

If you don't repay the loan as agreed, the lender can take possession of the property and sell it to recoup the money you owe.

The loan is made up of two elements:  

• The capital – in other words, the amount of money you borrowed to buy your property, and
• The interest– the amount the mortgage lender charges for lending you the money (which is why they're in business).

You'll see hundreds of different names for mortgages. Ignore them. They all boil down to the two main types:

• Repayment mortgages and
• Interest-only mortgages.

Actually there is a new third type – the current account mortgage – but if you want to learn the basics of mortgages now, you can read about that later.

Lenders often make things seem more complicated than they have to be. But don't worry – with our help, it can all be kept fairly simple.

The two most significant things about any mortgage are:

• The interest rate and
• The mortgage fees