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Mortgage glossary - I

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Mortgage terms defined on this page:



Income Multiplier

Income Multipliers are calculations used by mortgage lenders to determine how much they are prepared to lend. In the most common circumstance, the multiplier used is 3 times a single income or 2.5 times joint incomes, whichever gives the higher figure. For instance, if your salary is £25,000 you might expect to raise a mortgage of £75,000. A joint salary of £45,000 could raise £112,500.
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Indemnity Premium

See Higher Lending Charge.
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Initial Interest

This is the amount of interest charged between the date the funds are drawn and the date of the first repayment. This means the first mortgage payment will be relatively large. The initial interest amount will depend on the stage in the month at which the mortgage is completed.
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Insurance Guarantee premium

See Higher Lending Charge.
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Interest Only Mortgage

With an interest only mortgage, the borrower pays back the interest on the mortgage amount. The mortgage amount itself is paid back through an endowment policy, pension plan or Pep. The mortgage may be arranged without the support of a particular repayment vehicle, but many lenders insist that the borrower makes their own arrangements to repay the capital.
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ISA mortgage

This is the amount of interest charged between the date the funds are drawn and the date of the first repayment. This means the first mortgage payment will be relatively large. The initial interest amount will depend on the stage in the month at which the mortgage is completed.
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THINK CAREFULLY BEFORE SECURING ANY DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.