U4 Topic 12

Question 1

Q4

Which of the following would not be a potential risk for a discounted rate rep repayment mortgage?

-negative equity
-Interest rate risk
-Investment risk

Answer 1

-Investment risk

Repayment mortgages are not exposed to investment risk

Question 2

Q10

For which of the following interest only mortgages is the lender not required to check during the term that’s a repayment strategy is still in place and likely to meet it’s target?

-Lifetime mortgage
-Endowment linked
-Fixed rate

Answer 2

-Lifetime mortgage

For interest only mortgages other than lifetime mortgages and bridging loans, the lender must carry out a review at least once during the mortgage term.