Glossary - Repayment Mortgages

Repayment Mortgage means paying the capital and interest on mortgage.
With a repayment mortgage the whole of the mortgage capital and the interest can be paid over a period of time. If all the repayments have been met at the end of the mortgage term the property will become yours.

Example: Choosing UK Mortgages
To help you decide which mortgage product is going to be best for you, you should consider the mortgage type and the terms and conditions taht Enquire to it. Repayment mortgages are a safe option as they are easy to understand, the capital as well as the interest is paid back each month,and so long as consumers are able to work out their own monthly obligations, they should have no problem making the repayments.
With interest only mortgages the payments are solely made on the mortgage interest, so when the mortgage comes to the end of its term the home owner still has to repay the lender the whole of the loan capital. Several types of interest only mortgages come with some type of savings scheme attached, these saving schemes help to make up the shortfall on the capital. These schemes rely on the interest rate or stock markets performance and they may not always make enough to repay all the outstanding mortgage capital.

Mortgage Tip
With a repayment mortgage the customer has the peace of mind knowing that the property is theirs once the final payment has been made, they do not then have to find the capitol payment.
An interest mortgage only pays back the interest on a mortgage loan, each month customers pay less than than they would have if they had a repayment mortgage but when the mortgage term ends the home owner still has to pay back the whole sum of the loan ( the capital) to the lender. Be sure of how you are going to raise the money to pay the capital before you agree to an interest only mortgage.

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