Welcome to our Mortgage Glossary. Here you will find definitions for more commonly used mortgage terms, making the jargon clearer. If you're unsure of any words or phrases, simply use the guide below.
Interest Calculated Daily
We usually calculate interest on a mortgage daily. When you make a payment on your mortgage the amount of interest we charge you will reduce the same day.
With an interest only mortgage, the monthly mortgage payment consists of an amount sufficient to pay just the interest due on the full amount of the loan. You pay none of the outstanding capital and at the end of the mortgage term you still owe the amount originally borrowed.
It is your responsibility to make other arrangements to repay the capital at the end of the mortgage term. This could include a savings plan, inheritance or even selling the property at the end of the mortgage term. You should review your plans regularly to ensure they are on target to repay your mortgage at the end of the term.
The rate at which interest is calculated on your mortgage. It is shown as a percentage.