Mortgage Advice From Ocean- Helping you find the right mortgage for you
When you enquire to Ocean Mortgages you will be given access to leading mortgage lenders through our panel of lenders enabling you to choose from many interest only mortgage plans. We will search our panel of mortgage lenders to find the best mortgage plan for your individual circumstances.
An Ocean mortgage adviser will examine your individual circumstances and discuss the different types of mortgages available. Whether you would like an interest only mortgage, part & part mortgage or a repayment mortgage, our adviser will discuss the benefits and draw backs of the different mortgage types and will be happy to help you through the remortgaging process answering any questions you may have.
What is an 'Part & Part mortgage'?
This is a relatively new type of mortgage that's designed to be a halfway house between an Interest-only mortgage and a repayment mortgage (also known as capital and interest). The idea of part & part mortgages is to combines the advantages of both types.
Compared to a repayment mortgage your monthly repayments are cheaper with a part & part mortgage than a comparable capital repayment mortgage.
This is because, while you're paying interest on everything you owe, you're only repaying part of the capital.
In the long run, though, this makes a part and part mortgage more expensive than a straight repayment loan, as more of your debt remains unpaid during the term and, therefore, collecting interest, you will also be left with a percentage of the mortgage amount outstanding at the end of the mortgage term which you will have to clear.
Because with a capital repayment mortgage you are paying back part of the capital repayment element, the monthly payments are higher than for a comparable interest-only mortgage.
However, it is less expensive over the full mortgage term.
This is because you are paying off some capital as you go, reducing your interest bill and leaving a smaller debt to be settled at the end of the term.
Basically, part of your mortgage is interest-only and the rest is repayment it's up to you to decide what split you want.
Mortgage Examples
Imagine you agreed to a £150,000 mortgage at 6 per cent interest
• Interest-only
On a fully interest-only basis, this would cost £750 a month giving a total of £225,000 over 25 years.
Add in the original £150,000 which would still need to be repaid
Total cost: £375,000
• Repayment
On a fully repayment basis, it would cost £966.45 a month, adding up to £289,935 over 25 years.
At the end of the 25-year term, you would be debt-free.
Total cost: £289,935
• Part and part
Dividing the debt equally between interest-only and repayment, the monthly cost would be £858, giving a 25-year total of £257,466.
But you would still owe £75,000.
Total cost: £332,466
So, going part and part on this basis would save you £42,534 on the straightforward interest-only deal, but be £42,531 more expensive than the fully repayment option.
Speak to an Ocean mortgage adviser on 0800 9169186
who will be happy to help you & answer any questions
you may have about part & part mortgages
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