Interest only mortgage


 

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Interest only mortgage

A mortgage where regular payments (usually monthly) only meet the interest requirements. The interest rate is usually variable and linked to prevailing rates but can be fixed for a given period. The capital amount outstanding remains approximately the same and the borrower will need to make additional provision for repaying this amount at the end of the term of the loan.



Similar Matches

Interest sensitive stock

Interest sensitive stock

Stocks whose earnings are dependent upon and change with the interest rate, e.g., bank stocks.


Imputed interest

Imputed interest

Used in accounting to refer to interest that has effectively been paid to a bondholder, even though no money has actually been paid.


Mortgage interest relief at source

Mortgage interest relief at source

The mechanism by which income tax relief was extended to a borrower on the interest paid on the first £30,000 of a mortgage on their main home.The system was known as MIRAS, and was operated by most building societies, banks and insurance companies, who would reduce the amount of interest eligible borrowers had to pay every month, and then claim the tax relief back from the Inland Revenue.The amount of relief available on MIRAS was gradually scaled down to 10% and ended altogether from 6th April 2000.


Compound interest

Compound interest

The interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan.


Covered interest arbitrage

Covered interest arbitrage

A combination of transactions on two countries' securities and exchange markets designed to profit from failure of covered interest parity. A typical set of transactions would include selling bonds in one market, using the proceeds to buy spot foreign currency and foreign bonds, and selling forward the return at a future date. See also one-way arbitrage.


Further Suggestions

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Real interest rate
open interest
compound interest
Interest only mortgages
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interest rate swap
Covered interest arbitrage
Noninterest bearing note
Open interest
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simple interest
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Daily interest


 
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