Most people borrow the money to buy their home from a bank or building society. They pay the money back every month over many years. This is called taking out a mortgage.
Mortgages
Bank
This is a place where you can keep your money safe.
Building society
This is a place where you can keep your money safe.
They pay back more than they borrow. This is called paying interest. It is how the bank or building society makes its money.
Bank
This is a place where you can keep your money safe.
Building society
This is a place where you can keep your money safe.
The bank or building society will not loan the whole cost of the property. They expect you to pay the first bit yourself. This first bit is called a deposit. People often save up for it. The sum could look like this:
Bank
This is a place where you can keep your money safe.
Building society
This is a place where you can keep your money safe.
- Cost of the house
- £180,000
- Deposit
- -£18,000
- Amount borrowed
- £162,000
- Interest to be paid
- £148,000
- Total to be paid back
- £310,000
- Monthly payment
- £1,230
When you have paid back all the money and the interest, you own the house or flat.
Interest
This is extra money you are charged when you borrow from a bank or building society.
There are many different kinds of mortgages.
Ask your advocate or friend to help you choose which is best for you.
Mortgage
A mortgage is a type of loan for buying houses. A loan means that you borrow money from the bank and then pay it back.
Or you could ask an independent financial adviser. This is a person who knows all about mortgages.
Mortgage
A mortgage is a type of loan for buying houses. A loan means that you borrow money from the bank and then pay it back.