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Apply for a mortgage online Should you rent or buy a house House Prices Remortgage your home Paying back the capital
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You can either pay a little at a time as you go (repayment mortgage) or pay it all off at the end (Endowment, Isa and pension mortgages).
Repayment mortgages - each monthly payment pays off a little of the underlying debt, as well as interest on the loan. At the end of the term the mortgage is cleared.
Endowment Mortgages use an endowment policy to provide life insurance and save funds to repay the loan at the end of the term (usually 20-25 years). If the investment performs badly, you could face a shortfall on your loan at the end of the repayment period.
Individual Savings Account (Isa) mortgages work on the same principle as endowments, but use an Individual Savings Account as the loan repayment method. If your investment performs badly you could face a shortfall at the end of the mortgage term.
Pension mortgages are similar, but work on the basis that pensions (both private and company) provide tax-free cash on retirement. At the end of the mortgage term the loan is paid out of your tax-free lump sum. They are not often used as it can be risky linking pensions to other investments.
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