Mortgage Types
Repayment Mortgages
With a repayment mortgage, every month you pay an amount of the lump sum borrowed and interest. This reduces the lump sum borrowed. As long as all the monthly payments have been made over the term of the mortgage (typically 25 years), you will have repaid the borrowed sum at the end of the term.
Your mortgage payments are divided into repaying the capital (money you borrowed) and interest payments which is interest charged on the loan.
At the start of the mortgage, the amount of capital reduced is small. Over the years as the capital is reduced, the interest element will become smaller and more capital is paid.
The monthly repayments on a repayment mortgage will be greater than an equivalent interest only mortgage.
Look at some Repayment Mortgage Options by visiting our Mortgage Tools pages or contact us for advice on repayment mortgages.
Interest Only Mortgages
As the name suggests with an interest only mortgage you are only paying off the interest on the loan. The capital remains unpaid.
Typically, interest only mortgages run alongside an investment. The idea being that the investment is used to pay off the mortgage at the end of its term or even provide a surplus. We do not provide advice on investments.
The danger with this type of mortgage is that if the investment does not grow as planned then there will be a shortfall at the end of the term and you could lose your home.
For both types of mortgages, consideration should be given to mortgage protection by means of Term assurance and income protection. See Insurance
Check out some Interest Only Mortgage options by visiting our Mortgage Tools or contact us for advice on interest only mortgages.
To find out more about interest payments go to our mortgage interest page
Contact us now directly on 0845 643 1537 - or fill out our online enquiry form
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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Registered Office: 37 Christchurch Avenue, North Finchley, London, N12 0DG Principal: Dinendra Haria
Tel: 0845 643 1537, email: info@dhfinancesolutions.co.uk
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