MORTGAGE JARGON BUSTER

Don’t know what a mortgage term means? Well you’re not alone! From AIP to stamp duty we are here to break down the most confusing mortgage jargon for you

1. Approval in Principle (AIP) – Lasts 6 months, and it gives you an idea of how much money you can borrow at that time, whilst you’re busy looking for a home.

2. Fixed rate mortgage – With a fixed interest rate, the monthly repayment you make is fixed for the period you choose, (normally one, two, three, five or 10 years). After this fixed-rate period has passed, your interest rate will become a variable rate unless you choose to take a fixed rate for a further period. A fixed rate is not affected by changes in general market interest rates.

3. Variable rate mortgage – A flexible rate that allows you to increase your repayments or use a lump sum to pay off all or part of your mortgage. With a variable rate, your monthly repayments may rise or fall, your monthly repayments reduces, and if variable rates rise, your monthly repayment increases. Variable rates can be increased or reduced at the discretion of the lender

4. Term – The term is the length of time over which you agree to pay back your mortgage. This is typically up to 30 or even 35 years. 5. Stamp Duty – A tax the government puts on your new home, costing 1% of the property price up to €1 million.