Repayment mortgage

A repayment mortgage consists of instalments throughout the term of the loan to pay off the money you borrowed together with the interest.

The Advantages of a repayment mortgage.

1. Repayment mortgages are considerably flexible. If you find yourself in trouble concerning your monthly payments, then your lender may increase the term, allowing you to reduce them.
2. Repayment mortgages are considered a low risk option because it is guaranteed that your loan will be paid off at the end of the term, along with interest. They are the only type of mortgage that can offer this security.

The Disadvantages of a repayment mortgage.

1. During the early years of your repayment mortgage most of your monthly payments go towards paying off the interest, so little actually goes towards paying off your outstanding loan. People who wish to re-mortgage during these beginning stages find it extremely difficult because they find they are simply back at square one, with little or no reductions in their current mortgage