When choosing a mortgage, it’s important to not only look at the interest rate and fees you’ll be charged but also what type of repayment you want. Generally speaking, there are three ways you can repay your mortgage; repayment, interest-only or a combination of the two.

Common factors that will influence the decision will be; how much you want to borrow, your credit score, the type of property and the timescale in which you need to move. We have strong relationships with dedicated business development managers at each institution, which means we can carry out in depth lender research before we even make an application

For our clients, financial confidence comes from knowing that we will always be honest with them and do our best to help them.

What is Capital and Interest?

Capital: the money you borrow
Interest: the charge made by the lender on the amount you owe

If you choose a repayment mortgage, you pay back the capital and the interest together. With an interest-only mortgage, you initially only pay back the interest on a monthly basis and repay the capital at the end of the mortgage term.

Repayment Mortgage
This is the most popular and most widely available mortgage repayment option. With a repayment mortgage you’ll make monthly repayments for an agreed period of time (known as the term) until you’ve paid back both the capital and the interest. This means that your mortgage balance will get smaller every month and, as long as you keep up the repayments, your mortgage will be repaid at the end of the term (usually 25 years).

Interest Only
An interest only mortgage gives you cheaper monthly payments, as you are only paying off the interest on the loan, not the capital. At the end of the mortgage term, you will still owe your lender the amount that you originally borrowed.
As part of the agreement with the lender, you will have to have a contingency plan in place to pay off the mortgage at the end of the term