Mortgages at Jyske Bank Gibraltar
What can you borrow for?
We can provide you with a mortgage to purchase property or to release equity against your existing property. We will generally provide mortgages up to a Loan to Value (LTV) of 70% but could consider a higher LTV in exceptional circumstances.
What types of mortgage do we offer?
Most loans are offered on a capital and interest repayment basis, where you pay the amount borrowed over the life of the loan. This can either be as:
1. A serial repayment mortgage: You pay the capital in regular, equal amounts over the life of the loan, plus separate regular interest payments, the amount of which varies over time as the loan capital amount reduces.
2. An amortising repayment mortgage: The cost of repayment of capital and interest is equally distributed over time so you repay the capital and interest by way of a regular equal instalment
The main differences between these two types of loan are (assuming like for like conditions):
With an amortising Loan, unless there is a change in interest rates, the regular repayment cost will be the same throughout the life of the loan, and you may find that this makes them easier to manage.
With a serial loan the combined cost of the regular capital and interest payments is initially greater than the regular cost of repaying an amortised repayment loan. (So with a serial loan you will initially have to budget more for the regular repayments than you would for an amortised loan). However, as you repay the capital faster with a serial loan, the cost of the regular interest payments will reduce over time (in line with the reduction in the loan capital amount outstanding) until eventually the combined cost of the regular repayments will be less than the cost of the regular amortised repayment. You will therefore pay less interest over the entire life of the loan.
Interest only mortgages: In certain circumstances, and on a case-by-case basis, we may also be able to consider offering a mortgage loan on an interest payment only basis. This could be either:
- for an initial interest only period, then followed by scheduled capital and interest repayments, or
- Interest only for the full term with capital repayment as a bullet payment at the end of the loan (e.g. with payment to come from a maturing endowment policy). In these circumstances, the Bank will need to satisfy itself that you will have the means to meet the cost of repaying the mortgage in full at maturity. Overall, you will pay more interest on an interest payment only loan, than had you been reducing the loan capital over time.
Interest rate type.
We can offer you:
- A variable interest rate which, for loans made in Pounds Sterling is linked to the Bank of England base rate, or to the Bank’s funding rate if drawn in any other currency.
With a variable rate linked to a base rate, the interest rate payable will go up or down in line with increases/decreases in the agreed base rate.
! You need to consider the very real possibility that interest rates will rise at some point, and your ability to meet the additional cost of the repayments when they do. For instance a 1% rise in the Bank of England base rate would result in an additional monthly cost of approximately GBP 42.50 for every GBP 50,000 borrowed.
Below is an illustrative example of the two different mortgage types offered by Jyske Bank
|Example 1||Example 2|
|Mortgage type||Capital and Interest (Serial Loan)||Capital and Interest (Amortising Loan)|
|Max. loan to value||70%||70%|
|Term||20 years||20 years|
|No. of monthly instalments||240||240|
|Borrowing rate||4.5 % (variable*)||4.5 % (variable*)|
|Total interest payable||£90,375||£103,671|
|Total amount repayable||£290,375||£303,672|
|Security required||Mortgage over property||Mortgage over property|
|(*based on the Bank of England base rate + 4% margin. Overall rate subject to change in line with base rate)|
Please note that the above examples are for illustration only and the borrowing rate offered will depend on borrower circumstances. In some instances additional security may be required (e.g. Guarantor), however, this will also depend on the circumstances of the mortgage.
Other costs to consider
In addition to the above costs, you will also be responsible for the Bank's legal costs, which will depend on the mortgage amount. A written estimate of the Bank's legal costs will be made available to you upon request and when your loan application is agreed. You should also bear in mind that you will have your own legal costs and expenses (e.g. taxes) to meet in respect of your purchase of the property. You may also have the opportunity of using the same law firm as the Bank and they may be able to offer you a discounted price. Please contact us for more information.
Suitable property insurance will be a condition of the mortgage, but is not arranged by the Bank and is your sole responsibility. Whilst we do not usually make life insurance a condition of the mortgage, you should consider if you would like to arrange cover to repay the loan in the event of death or loss of income from illness. There are various types of life cover available, but this is not arranged by the Bank and you should take your own independent advice.