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Tag: PAYMENTS
PAYMENTS
Stress ICR (Interest rate affordability stress test)
The interest rate affordability stress test is a crucial part of the mortgage application process in the UK. It is designed to ensure that borrowers can afford their mortgage repayments not only at the current interest rates but also if rates were to rise significantly in the future. This test is applied by mortgage lenders… Read more
Interest coverage ratio (ICR) explained
The interest coverage ratio (ICR) is a financial metric used to assess a company’s ability to pay interest on its outstanding debt. It is calculated by dividing a company’s earnings before interest and taxes (EBIT) by its interest expenses for the same period. The formula is: Interest Coverage Ratio=EBITInterest Expense\text{Interest Coverage Ratio} = \frac{\text{EBIT}}{\text{Interest Expense}}Interest Coverage Ratio=Interest ExpenseEBIT​ Importance of the… Read more
Mortgage payment holidays explained
Understanding Mortgage Payment Holidays A mortgage payment holiday can provide much-needed financial relief for homeowners facing temporary financial difficulties. However, it’s essential to understand the details, benefits, and implications of taking a payment holiday before making this decision. In this article, we’ll explore what a mortgage payment holiday is, how it works in the UK,… Read more
What is a discounted rate mortgage?
A discounted rate mortgage is a type of mortgage product where the lender offers borrowers a temporary discount on their standard variable rate (SVR) for a specified period at the beginning of the mortgage term. This discount typically lasts for a predetermined introductory period, often ranging from two to five years, although longer or shorter… Read more
Understanding SVR’s
In the UK mortgage market, understanding different types of interest rates is crucial for borrowers. One of these types is the Standard Variable Rate (SVR). This article delves into what SVR is, how it works, and its implications for mortgage borrowers in the UK. What is SVR? The Standard Variable Rate (SVR) is the default… Read more
Long term mortgages, how much more expensive are they?
Long-term mortgages, typically spanning 25 to 35 years, have become increasingly popular among homebuyers in the UK seeking to spread out their repayments and reduce monthly costs. While these extended mortgage terms offer lower monthly payments, borrowers may end up paying more in interest over the life of the loan compared to shorter-term mortgages. Let’s… Read more
Ways to pay off your mortgage early
Accelerate Your Journey to Homeownership: Ways to Pay Off Your Mortgage Early in the UK Paying off your mortgage early can save you a significant amount of money in interest and free up your finances for other goals. While it requires discipline and strategic planning, the benefits of becoming mortgage-free sooner are well worth the… Read more
Are you paying too much for your mortgage?
Are You Paying Too Much for Your Mortgage? Here’s How to Find Out and What to Do About It A mortgage is one of the most significant financial commitments most people will ever make. Ensuring you have the best possible deal can save you thousands of dollars over the life of the loan. However, many… Read more
What are the advantages of overpaying your mortgage?
The Main Advantages of Making Mortgage Overpayments Making mortgage overpayments is a strategy many homeowners use, to save money and gain financial freedom more quickly. By paying more than the required monthly mortgage payment, you can significantly reduce your debt and enjoy several financial benefits. Here’s an in-depth look at the main advantages of making… Read more