Protection

The monthly mortgage repayments are based on the prevailing rates of interest the lender charges - not the Bank of England (BoE) base rate. In other words, it is entirely the lender’s decision on the rate of interest they charge the borrower.

The interest on the loan will neither rise nor fall for a pre-determined period of time. Although the monthly repayments will stay fixed, if interest rates fall, the borrower could potentially end up paying more than he or she would on another type of mortgage.

A separate and additional mortgage to the homeowner’s main (or first) mortgage. Second charge mortgages (sometimes known as ‘Homeowner Loans’) are loans which are secured against the borrower’s residential property, and as such, are available only to homeowners. In common with remortgages, second charge mortgages are sometimes used by homeowners to raise money.

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Where a mortgage borrower also has savings, by giving up the interest on those savings he or she can reduce the amount of interest they pay on their mortgage debt.

A mortgage that pays a lump sum cash rebate of a fixed amount of money, or a percentage of the actual loan, on completion of the mortgage or shortly after.