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Interest only mortgage |
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Interest only mortgageA 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 MatchesInterest sensitive stockInterest sensitive stockStocks whose earnings are dependent upon and change with the interest rate, e.g., bank stocks. Imputed interestImputed interestUsed 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 sourceMortgage interest relief at sourceThe 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 interestCompound interestThe interest paid on the principal balance in a mortgage and on the accrued and unpaid interest of the loan. Covered interest arbitrageCovered interest arbitrageA 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 SuggestionsInterestNominal interest rate Short interest Deferred interest bond Wild Interest Variable Interest Rate Interest rate parity theorem Real interest rate open interest compound interest Interest only mortgages Interim interest interest rate swap Covered interest arbitrage Noninterest bearing note Open interest Interest equalization tax Earnings before interest, taxes, depreciation, and amortization (EBITDA) Interest deduction Term structure of interest rates Equilibrium rate of interest simple interest Assumed interest rate stepped interest debenture stocks Daily interest |
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