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Mortgage Repayment Methods

There are a couple of different mortgage repayment methods available. Currently, most mortgages being offered are capital & interest repayment method mortgages. This involves paying back capital and interest at the same time. The loan is made up of two parts: the capital which is the money you borrow and the interest which is the charge made by the lender on the amount you owe.

For information on what to do when switching from interest only to a repayment mortgage view our blog today.

Capital Repayment Mortgage

One of the most common mortgage repayment methods is a capital and interest repayment mortgage. On a capital repayment mortgage you’ll make monthly repayments for an agreed term until you’ve paid back both the capital and the interest.

Therefore, the amount you owe will decrease every month and, as long as you keep up the repayments, your mortgage will be repaid at the end of the term. The term is usually from 10 to 30 years.

Visit our capital repayment mortgages page for more information, or contact us.

Interest Only Mortgage

Interest-only mortgage is another type of loan where you pay the interest due on the amount you borrowed each month. You will repay the capital at the end of the mortgage term via other means i.e. sale of property, other investments or lump sum from savings. However, very few interest-only mortgages are now offered and only in special circumstances.

For more information on mortgage repayment methods, please get in touch with the expert team here at Stuart Brown Mortgage Services!


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