Understanding Mortgages

What is a mortgage primarily used for?

• To start a business

• To pay for education

• To purchase a house

• To buy a car

Why do many people need a mortgage to buy a house?

• Because they want to save money

• Because house prices are low

• Because banks offer low interest rates

• Because they cannot afford the full price with their savings

In the example provided, how much is borrowed from the bank if the house costs £200,000 and the deposit is £20,000?

• £220,000

• £200,000

• £180,000

• £20,000

What is the total repayment amount over 25 years for a £180,000 mortgage at 5.54% interest?

• £200,000

• £332,898

• £180,000

• £152,898

What could happen if you fail to make mortgage repayments?

• You will receive a fine

• Nothing will happen

• The bank could repossess your home

• The bank will increase the interest rate