In this lesson, we will learn about the general principles of mortgages and mortgage loan repayment.
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A mortgage is a debt that must be repaid, with interest, as a result of purchasing a house.
False
Correct answer: True
True
Q2.
If you had a mortgage, you would prefer to have a high interest rate.
Correct answer: False
False
True
Q3.
If I borrowed £100,000 in the form of a mortgage at a rate of 4% per year interest for 5 years, how much would I pay back at the end? (Assume compound interest, no payments made until the end and the answer is rounded to the nearest pound).
£104,000
£120,000
Correct answer: £121,665
£121,665
£520,000
Q4.
If I borrowed £350,000 in the form of a mortgage at a rate of 3.2% per year interest for 20 years, how much would I pay back at the end? (Assume compound interest, no payments made until the end and the answer is rounded to the nearest pound).
£574,000
Correct answer: £657,146
£657,146
£657,147
£974,000
Q5.
Which would cost more? A £200,000 mortgage that had a rate of 0.5% for 35 years or a £120,000 mortgage that had a rate of 3% for 25 years?
£120,000 mortgage that had a rate of 3% for 25 years
Correct answer: £200,000 mortgage that had a rate of 0.5% for 35 years
£200,000 mortgage that had a rate of 0.5% for 35 years