Remortgage repayment options

There are three options for you to choose from in repaying your mortgage, these are: repayment, interest-only, or a combination of the two.

Repayment

The most popular option, and the one that is the most widely available is a repayment mortgage. With a repayment mortgage, you'll make monthly repayments for a pre-arranged period of time until you've paid back both the capital and the interest.

This means that your mortgage balance will get progressively smaller, month by month, and provided that you keep up with the repayments, your mortgage will be repaid at the end of the term.

You should bear in mind that when you start your mortgage, the repayments will mainly be coming out of the interest amount, so should you decide move house or repay the mortgage in full in the early years, you'll find that the amount that you owe will not be too different to the starting figure.

Interest-only

With an interest-only mortgage you will only pay the interest due on the amount you borrowed each month. So, while your monthly payments will be less than they would with a similar repayment mortgage, you will still owe the amount you originally borrowed when you reach the end of the mortgage term.

Lenders will make sure you have a repayment strategy in place, so that you'll have money to pay off the capital at the end of the mortgage. Different lenders will obviously have different criteria for meeting their strategies, but the repayment plan will often mean paying regularly into savings or investments and could include pensions and other properties.

If you do decide to follow an investment plan, the responsibility to ensure that you can pay what's owed on the capital at the end of the mortgage falls on you, however your lender will also check on this at least once during the repayment period. If the plan is not on track, then it will be very difficult for you to remortgage or get the loan restructured.

It is fairly common for lenders to request a larger deposit amount if you have an interest-only mortgage. If you have a substantial deposit and are considering an interest-only mortgage you may want to get financial advice to work out the best repayment method.

Combination

There are a number of lenders who offer mortgages on a part-repayment and part-interest-only basis. This option means that at the end of the term some of the mortgage capital will still be owed and will need to be repaid.



Note: For a free no obligation chat with an independant mortgage specialist about your requirements please complete our mortgage enquiry form below.

Make a Free No Obligation Remortgage Enquiry

Stop Press: Find the perfect mortgage!
Lending criteria has been relaxed and our specialists can find you great mortgage offers to compare.
Our team do all the work to find you the best offer
We'll help you find the best mortgage for your needs and ensure that everything runs as smoothly as possible.
Deposits required are again falling
The cost of the best deals has dropped recently for those borrowing either 80%, 85% or 90% of their property's value
Independent, searching the whole market
With 1000's of mortgage products available our mortgage brokers will source the mortgage that suits your situation.
Please complete this quick, free enquiry form.
£
£

£



£
mths

Your Details

Home Buyer Guides

Home Buyer News

Speak with an independant mortgage specialist

About Company

HomeBuyService.co.uk is part of the SFN Network of websites. Sitefinders Net Ltd is a U.K based company setup in 1995. Our core business is the development of online businesses using the generic domain name concept. We have a growing portfolio of websites in many different industries such as electronics, finance, retail, seasonal and health.

Privacy Policy
FAQ
Sitemap

Get in Touch