A mortgage is when money is lent by an institution necessary to secure ownership of a property until the total debt has been fully repaid. Mortgages are based on the equity value of the home, the applicants income, and their debts. There are generally two types of mortgages available: fixed or variable.
Fixed mortgage loans are those that are set at a pre-determine amount and remain at that value for the course of the loan repayments. In contrast, variable mortgage loans are those that fluctuate with the market and economy and so may potentially rise or conversely when the Reserve Bank decides to raise or lower rates.
