With several different mortgage repayment methods, and with thousands of mortgage deals to choose from, deciding which is right for you can be a confusing experience. First Mortgage offers a free, impartial service with no hidden charges or commissions, helping you to find the right mortgage repayment method from all UK lenders.
Which mortgage repayment method is right for you?
There are four main ways to repay your mortgage. Capital and interest / repayment and interest only mortgages are the two most popular types of agreement. You can also find investment backed, and part and part deals.
Each repayment method has pros and cons, and you will need to decide which type fits your needs best. The basic differences are_
- Repayment mortgage. This is the most popular method of repayment. Your monthly repayment pays off the interest owed and a part of the initial capital borrowed.
- Interest only mortgage. With these you only pay off the interest owed each month, so you can put your money into other investments. You will need to pay off the entire mortgage at the end of the agreed term.
- Investment backed. This is very similar to an interest-only mortgage, except that you agree to invest the money saved in a policy such as an equity plan etc.
- Part and part. You can combine both interest only and repayment mortgages, usually for a set period each for the duration of the mortgage.
There are three main types of mortgage currently available, for more information on these, please follow the links below.
For more information, or to arrange a mortgage, Call us on 0345 603 1525 to talk with one of our friendly and experienced team. We are happy to discuss your situation and help you choose the best mortgage repayment method for your needs.
Related Internet Links:
UK government consumer information | Financial Conduct Authority
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