Mortgage Repayment

Once your mortgage application has been accepted in principal, you may have the option of deciding how you repay the loan.

Repayment mortgage

With a repayment mortgage, your monthly repayments cover both capital and interest on the loan.

As the term continues, the amount outstanding on the loan reduces so the full amount of the loan will have been repaid at the end of the term as long as you have made all your payments on time.

No other repayment vehicle is needed.

Interest only mortgages

With an interest-only mortgage, your payments to the lender cover only the interest on the loan and do not repay any of the capital. The total amount of your debt does not reduce over time and the full amount of the loan still has to be repaid to the lender at the end of the term, so you will need to ensure you have the means to repay the capital.

Part and part mortgages

You can combine both interest only and repayment mortgages, usually for a set period each for the duration of the mortgage.