Capital and interest mortgage / Repayment mortgage

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What is a capital and interest / repayment mortgage?

A capital and interest (repayment) mortgage is an agreement where each monthly repayment covers the mortgage interest plus a part of the initial capital borrowed. Usually, the mortgage period spans up to 25 years or more. Because of the way interest repayments work, the majority of the mortgage is paid off in the second half of the term. Pros and cons of a repayment mortgage...

 Many people opt for a repayment mortgage because they are easy to understand and allow you to pay off the sum in full at the end of the loan term (assuming all payments are met in time).

 It is also very flexible, with options to increase your monthly repayments or even make one-off payments (subject to your terms and conditions of course).

 However, with a capital and interest / repayment mortgage life assurance is not usually included in the original deal.

 Another disadvantage is that it can be harder to pay off larger sums in the early years of your mortgage, because of the way the interest is calculated. Initially, much of your repayment will be going towards paying the interest, and only some on the borrowed capital.

 Despite this, repayment mortgages are one of the most popular types and suit a wide variety of people.

To find out if repayment is the right deal for you, call us on 0845 603 1525 for a free consultation with one of our experienced team. You may also want to view other types of repayment options, including interest only, investment backed, and part and part.

Find a capital and interest / repayment mortgage through First Mortgage