Repayment Mortgages

Also known as capital mortgages, Repayment mortgages are the traditional means of paying for a property so that eventually it becomes fully yours as a result of the payments. The term of a repayment mortgage is typically 25 years and at the end of that period you would, if payments have been kept up, owe nothing to the lender.

Your mortgage payments are divided into capital repayments which are repayments of the money you have borrowed and interest payments which are repayments of the interest charged for the loan.
 
Every month you pay off some of the interest and some of the capital. The monthly repayments on a repayment mortgage would be greater than an equivalent interest only mortgage.

Please look at some Repayment Mortgage Options by visiting our Mortgage Tools pages or contact us for advice on repayment mortgages.

Interest Only Mortgages

As the name suggests with an interest only mortgage you are only paying off the interest on the loan. The capital remains unpaid.

Typically, interest only mortgages run alongside an investment, we are not able to provide advice on investments. The idea being that the investment is used to pay off the mortgage at the end of its term.

The danger with this type of mortgage is that if the investment is unsuccessful you would need to find an alternative source of funds to clear your mortgage.

Proof of investment is no longer required by many lenders for interest only mortgages.

Please note that it is your responsibility to ensure that your mortgage is paid off at the end of the term.

Please check out some Interest Only Mortgage options by visiting our Mortgage Tools or contact us for advice on interest only mortgages.

To find out more about interest payments go to our mortgage interest page