More About UK Repayment Mortgages

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More About UK Repayment Mortgages

Repayment mortgages are probably the oldest and simplest type of loan around. Despite a number of new variations on the repayment concept having been introduced in recent years, the basic principles have not changed, and a repayment mortgage is still one of the best ways to purchase a home.

A repayment mortgage is probably the simplest kind of home loan available. It works like this:

Borrow an agreed amount
Make repayments on a fixed schedule, including interest
At the end of the mortgage term, you will owe nothing and will own your home outright

Each month's repayment is made up of two parts:

capital sum
Interest

The capital sum is the money you originally borrowed, and you repay a part of this each month.

The interest payment can vary over time, depending on whether your mortgage's interest rate changes, and how much you owe.

Whether your total monthly payment varies each month may also depend on your mortgage type. If you are on a fixed rate mortgage, your total monthly payment will be fixed for the duration of the fixed rate.

If you are on a mortgage with a variable rate, such as a tracker, discount or capped rate mortgage, your payments could potentially vary (up OR down) every month, if your bank or building society changes their interest rates.

To read more on this subject please see the list below or your mortgage guide or your home buying guide

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Value of Property	£
		(eg 125000)

Borrow How Much?	£
		(eg 92500)

Your Mortgage Type

First time buyer?		Yes No
Have you found property?		Yes No
Country

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