ISA Mortgage
An ISA mortgage loan is funded by contributions to an Individual Savings Account. ISAs offer bonds, shares, life insurance policies and tax-free growth which is generated mainly by stock market investment. They can be used in conjunction with interest only mortgages to pay off the loan at the end of the term. There are specified limits on how much can be paid into the different types of ISAs.
If the ISA does not have a life insurance element, some lenders may require a separate term assurance be taken out for the term of the loan.
The ISA aims to repay the loan's capital at the end of its term, but the interest element must be cleared separately as you go along.
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