Abstracts » Business

A path through the mortgage maze

Article Abstract:

UK house prices could rise by 7% in 1997, according to the Halifax building society, and cheap mortgage deals are being withdrawn. More than half UK borrowers use endowment mortgages, paying into a fund to accumulate enough to repay the capital. There are high penalties for early surrender and endowment mortgages tend to be more expensive if interest rates are high. Repayment mortgages are not exposed to risks from stock market investments but are more expensive if interest rates are low, and little capital is paid if borrowers move frequently, while endowment mortgage holders can transfer their fund to a new mortgage.

Real Estate, Real Estate and Rental and Leasing, Real estate industry

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Cutting a swathe through the mortgage maze

Article Abstract:

The proportion of net income spent on mortgages has dropped to 32.1% for the average home buyer in 1998 from 71.3% in 1990, according to Cheltenham and Gloucester. There is a wide variation in mortgages available and low interest rates do not necessarily involve the best deals. Repayment mortgages are flexible, though missing payments tends to be expensive. Endowment mortgages have become popular but do not also offer good value. Mortgages are also available with upper andlower limits on interest rates.

Personal Financial Mgmt, Prices and rates, Personal finance, Mortgages

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