What the f***nce! – part 4

Don’t know your AIP’s from your APR’s? No worries, this week we’ll be explaining a few mortgage terms:

APR stands for Annual percentage rate. An annual percentage rate (APR) is the annual rate that is charged for borrowing (or made by investing), expressed as a single percentage number that represents the actual yearly cost of funds over the term of a loan. This includes any fees or additional costs associated with the transaction. For you, this will be the overall cost of the mortgage.

Offset mortgage
An offset mortgage links your mortgage with your savings and, sometimes, your current account. Your credit balances are offset against your mortgage debt so you only pay interest on the difference, while also paying off the capital.

So if you have borrowed £200,000 and have savings of £20,000, you will only be paying interest on £180,000. As your savings go up or down over time, so will the amount of the mortgage on which interest is charged.

Stamp Duty
A stamp duty is the tax placed on legal documents usually in the transfer of assets or property. This tax is placed on the transfer of not only homes and buildings but copyrights, land, patents and securities. The transfer of documents is only legally enforceable once they are stamped, which shows the amount of tax paid.


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