Home Mortgage LoanHome Mortgage Loan Rates Explained

Buying a home is the largest financial undertaking that most of us will experience. Since it is rare to be able to afford a property outright, taking out a home mortgage loan is seen as the standard way of purchasing a property. A home mortgage loan is a financial product, whereby you agree to borrow a fixed amount of money from a mortgage lender for an agreed period of time. Based on the amount that you would like to borrow, and the money that you yourself are able to put up for the sale of the property, the lender calculates a rate of interest that you must pay on top of your home mortgage loan. In many cases, the mortgage lender offers an introductory interest rate for a certain number of years, followed by interest at their standard variable rate (SVR), which is unique to that lender. More info

Your home mortgage loan payments would happen monthly, and you can choose to either pay back some of the money borrowed each month plus the interest (‘repayment’ home mortgage loan) or you can just choose to pay back the interest, and then pay the full balance owed at the end of the mortgage term (‘interest-only’ home mortgage loan). You should only choose the second option if you have savings that you are planning to use to pay back the home mortgage loan, or if you have an investment scheme running alongside the home mortgage loan. Otherwise, with the expected rise in house prices, you will find yourself unable to pay back the full sum at the end and may therefore lose the property. Less