Compare Repayment Mortgages

With a repayment mortgage, also known as a capital repayment mortgage, you make monthly payments which contribute towards the total amount borrowed and the interest payable. Repayment mortgages are repaid over a specified period. Assuming you continue to make all your monthly contributions in full, the mortgage is guaranteed to be paid off in full at the end of the arranged mortgage term.

During the early years of the mortgage, the majority of each monthly payment goes towards paying the interest owed. The amount paid off each year increases as the mortgage term progresses.

Advantages

• Provided that you make all the required monthly mortgage payments, you are guaranteed to pay off your mortgage in full by the end of the repayment period.
• It removes the risk of having an investment, the performance of which is dependent on the stockmarket.
• You are less likely to suffer from negative equity because your mortgage balance will be reducing month on month.
• Assuming your property has not dropped in value, as the capital repayed increases you will see an increase in the level of equity in your property. Consequently, when you remortgage or move home you may find it easier to obtain a mortgage and you may be able to avoid paying a Mortgage Indemnity Guarantee.
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