Understanding Mortgages

What is a mortgage primarily used for?

• To pay for education

• To start a business

• 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 generally low

• Because they prefer to rent

• Because they cannot afford the full price upfront

In the example provided, how much was the mortgage amount for a house costing £200,000?

• £20,000

• £180,000

• £200,000

• £285,000

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

• £200,000

• £285,000

• £180,000

• £332,898

What could happen if a borrower fails to make mortgage repayments?

• The borrower will receive a fine

• The borrower will be given more time to pay

• The property could be repossessed by the bank

• The bank will increase the interest rate