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Mortgage

A mortgage is a loan an individual takes out from a mortgage lender to help pay for a property. If the individual doesn't repay the loan as agreed, the lender can take possession of the property and sell it to recoup the money owed. The loan is made up of two elements – firstly, the capital, the money borrowed to buy the property and secondly, the interest, the amount the mortgage lender charges for lending the individual the money.

Mortgage Endowment Policy

A mortgage endowment is a mortgage loan plus a separate savings scheme in the form of an endowment policy. The mortgage loan is interest-only. The endowment policy is projected to grow enough so that the individual will be able to repay the amount borrowed at the end of the mortgage term, based on projection. Policy performance will depend on the movements of the financial markets and can result in a shortfall or surplus. The policy will also include a life assurance policy element, providing life cover for the total amount of the loan.

Mortgage Payment Holiday

A mortgage payment holiday is an arrangement an individual can make with their lender that allows them to temporarily halt or reduce their monthly mortgage repayments.

Mortgage Protection

Mortgage payment protection is an insurance policy, which if an individual can't work due to illness, injury or redundancy pays out a monthly sum to cover their mortgage. It is also known as accident, sickness and unemployment cover (ASU). The time period covered is usually fixed e.g. 12 or possibly 24 months.