Mortgage Introducers
Repayment and collection methods
Capital & Interest
The most common type of repayment method for mortgages which finance the purchase of overseas property is the Capital & Interest method. The repayments are made monthly and the repayment amount only changes if the interest rate changes – this applies only to variable rate mortgages as fixed rates mortgage repayments remain the same throughout the period of the loan. Each instalment includes a portion of the capital as well as interest* for the month and as the loan matures the capital portion of the instalment becomes bigger.
Interest Only
This mortgage product provides for only interest* to be paid on the amount borrowed and the repayment of capital will occur at the end of the mortgage term. Because the capital owed to the bank does not reduce and therefore the risk to the bank over time remains greater, the interest rate applied is often higher than for Capital & Interest mortgages. Furthermore the maximum mortgage term offered on Interest Only mortgages is usually less than that for Capital & Interest mortgages.
Click to see our Greece and UK mortgage terms.
* Interest payable on all our mortgages is set by reference to the European Central Bank Base Rate or EURIBOR or LIBOR depending on the currency of the loan and other factors.
Collection
Monthly overseas mortgage instalments are collected by Direct Debit in Sterling from UK bank accounts. When collecting Sterling, we automatically convert the Euro instalments at market rates.
In accordance with Direct Debit rules we notify you in good time of the next instalment amount (if this changes) that will be collected from your bank account.