Capped rate mortgage

 

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Capped rate mortgage

As with all variable rate mortgages, the rate follows the lender's SVR up and down. The difference with this type of mortgage is that the rate is guaranteed not to go above the level at which it is 'capped'. This type of mortgage is popular in times of steadily rising interest rates.

Capped rate mortgage

A mortgage which guarantees the interest rate charged will not rise above a certain level. But it may fall in line with variable rates.



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Council of Mortgage Lenders

Council of Mortgage Lenders

An institution that sets out code a code of good practice which mortgage lenders volunteer to stick to - they are not regulated by the government.


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Mortgage interest deduction

In the US, an allowable federal tax deduction for the annual interest paid on a mortgage.


Standing mortgage

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An interest only mortgage where no arrangements are made at the outset for the repayment of the loan. If a specific investment vehicle has not been arranged to provide funds for this purpose, the borrower will have to repay the loan by some other means. If the capital is not repaid, the lender can repossess the property and sell it to recover as much of the debt as possible.


Mortgage application fee

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A charge purely for applying for a mortgage. Paid to the lender upfront at the time of application it is usually between 100 and 300.This type of fee is becoming less common than an arrangement fee. As with arrangement fees, this type of mortgage fee is usually found with the special deals from lenders possibly to restrict the number of applicants by only attracting serious buyers. Some of the time this fee is refunded on completion of the mortgage.


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Graduated payment mortgage

A mortgage scheme in which monthly payments commence at a lower level and increase over a period of a few years to a higher level which is subsequently maintained.


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