Repayment Mortgage

What is a Repayment Mortgage?

A repayment mortgage is the type of mortgage that most people think about. The idea behind a repayment mortgage is that you pay monthly for a set period and each payment consists of an element of capital (i.e. paying off the balance of the mortgage) and interest.

During the early years of a repayment mortgage the amount paid is mainly interest, with a little capital being paid off. As the contract develops, more and more of each payment becomes capital, and less interest (especially as the balance reduces). This means that provided you make all required payments on time, your mortgage will be guaranteed to be paid off when the mortgage period is over.

Many people opt for a repayment mortgage on for this very reason - a repayment mortgage is the safest option as it means that you will have that guarantee.

There are many options available under a repayment mortgage. To discuss these with an adviser contact us.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.