You want to buy a house, but you haven’t quite saved up enough money.
Enter mortgage companies, or lenders.
Using a very simple example, you want to buy a house for £100,000:
You put in £25,000 of your own money.
The bank or the lender comes along and puts in £75,000 of the money.
When combined, totals £100,000 and enough to buy the property.
Happy days, you’re a homeowner!
Now the mortgage company doesn’t lend money for free. They have to make money too, so they charge an interest rate on the money that they’ve lent to you.
With an interest only mortgage, you’d pay 2% per annum, for example. That works out to be £1,500 per annum, or £125 per month. That is the cost to you for having that mortgage over the lifetime of that mortgage.
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Video and Graphics by Freddie Marriage Photography
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