Photo credits to www.thelittlehousecompany.co.uk
In the United Kingdom, the mortgage market is probably one of the most competitive and one of the most original in the world. Most loans are funded by credit unions, building societies, or banks. Because there were substantial improvements and strategy diversifications made beginning in 1982, the United Kingdom now has several types of mortgages.
Repayment mortgage is a type of mortgage wherein both interest and capital is required to be repaid. Interest-only mortgage is a mortgage type wherein the capital will be repaid at the end of the period of mortgage. Endowment mortgage is a type of mortgage wherein the capital is repaid through any of the endowment policies at the end of the term of the mortgage.
An investment-backed mortgage is a mortgage type wherein the capital is repaid through the proceeds of an ISA or other investment plan at the end of term of the mortgage. This type of mortgage is also referred to as an ISA mortgage. A pension mortgage is a mortgage type wherein the personal pension plan is used to repay the mortgage upon retirement. The lump sum that is taken as repayment is tax-free.
A Buy-to-Let mortgage is a mortgage type that is semi-commercial. This type of mortgage is offered to tenants of residential properties. A Right-to-Buy mortgage is a mortgage type that is arranged for tenants of housing associations. A Let-and-Buy mortgage is one where a tenant can let his existing property and then use the mortgage to buy another property. A flexible mortgage is a mortgage type that allows more capital payments without being given a penalty. This type of mortgage even allows underpayments.