AMS


Advanced Mortgage Services Ltd is an appointed representative of The On-Line Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Advanced Mortgage Services is registered in England. Company registration number 4751565.

Cherry Tree House, 20 Inverleigh Road, Bournemouth, Dorset, BH6 5HA.

Advanced Mortgage Services Ltd website is only for the use by UK residents & is subject to the UK regulatory regime.


David Hindmarch

Mortgage & Insurance consultant

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Types of Mortgages


Interest Only


An Interest only mortgage is one whereby you only pay the interest charged on a monthly basis. For example, if you have a £100,000 mortgage on an Interest only basis where you will pay 5% Interest over 25 years, your monthly payments will be £416.66 per month. If you continue to only pay the interest, at the end of 25 year term you still owe £100,000 which will need to be repaid.


Repayment


A Repayment mortgage is one whereby you repay both the interest and capital on a monthly basis. For example, If you have £100,000 mortgage on a repayment basis over 25 years and pay 5% interest, your monthly payments will be £584.59 per month. If you continue the repayment mortgage for the full 25 year term you should have fully repaid the mortgage.


Fixed


A Fixed rate mortgage refers to the rate at which interest is charged and is fixed for a set period of time. For example: £100,000 25 year repayment mortgage, fixed at a rate of 5% for 2 years, you will pay £584.59 per month. At the end of the 2 year the rate reverts to the lenders standard variable rate of 6% for example your monthly payments will then be £644 per month.


Capped


A Capped rate mortgage combines the advantages of a low variable interest rate with the security of a fixed upper cost (the capped rate). These products are not that common today.


Tracker


A Tracker rate mortgage is a variable interest rate mortgage which normally tracks the Bank of England base rate. While these can have lower interest rates than fixed rates products there is the added risk that your mortgage could increase significantly if the Bank of England rate increases. For example if the Bank of England interest rate were to increase by 3% the monthly increase for a mortgage of £100,000 would be £250 per month.


Discount


A discount mortgage is similar to a tracker rate mortgage because it can vary up or down but instead of tracking the Bank of England rate it will be dependent on the lenders standard variable rate. These can often save considerable amounts of money compared to paying interest at the standard variable rate but you need to budget for the higher rate at the end of the discount rate period.


Flexible


Some lenders have products which can include flexible features allowing lump sum or regular over payments which quickly reduce the mortgage balance and interest that is charged. Sometimes they can also include the facility to withdraw the over payments made if required. These products can be very useful for those people receiving variable incomes such as those who are self- employed or those receiving bonuses.


Offset


An offset mortgage could be either a fixed, tracker or discount product but also has a linked bank account set up at the same time as the mortgage. The benefit this can provide is that the funds held within the offset account can reduce the interest charged on the mortgage account. The greater the funds held in this account the larger the savings will be. These are very useful for those people who are higher rate tax payers and also want quick access to their savings.



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What is a Mortgage?

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Types of Mortgage Advice Adviser Broker in Bournemouth, Christchurch, Poole, Highcliffe, New Milton, Lymington, Ringwood, Ferndown, Dorset and Hampshire.


Your home is at risk of repossession if you do not keep up repayments on a mortgage or any other loans secured on it and you should think carefully before securing any debts on your home


In regard to residential mortgages we normally charge a fee of 0.5% of the loan. This fee will be reduced by any commission received from the lender typically 0.35%. Fees would become payable on completion of the mortgage.

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