This
is the old fashioned, traditional type of
mortgage and remains the only way the property is actually
guaranteed to be yours at the end of the mortgage
term - provided you have repaid the loan.
Your
mortgage debt is divided into capital
repayments(ie repayment
of the money you borrowed) and
interest
payments(ie repayment of the interest
you're being charged for the loan).
As
you pay off your mortgage every month you're paying off a bit
of capital and a bit of interest until the
full debt is repaid.
You
usually pay off mostly interest in the early years and then
gradually more of the capital
debt. It may seem as if this is costing more but that's
because unlike the other types of mortgages you're paying off
the capital
and not just the interest.
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