Interest is the cost payable to a financial institution, such as a bank, for borrowing money to fund part of a property’s purchase i.e. a Leveraged investment. Interest is usually expressed as an annual percentage rate.
A simple example: debt of £250,000 with an interest rate of 4% per annum means that £10,000 is payable during the course of the year to the debt provider. This is often paid monthly or quarterly.
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