Repayment Mortgage

What is a repayment mortgage?

There are two main types of mortgage, endowment and repayment mortgage. The repayment mortgage is the most basic and the most popular mortgage type and is made up of two parts; the interest and the capital sum borrowed. Repayments are made monthly and most of the money you pay each month in the early stages of your repayment mortgage just covers the interest but as time goes on an ever increasing proportion of your monthly payment pays off the capital some borrowed.

Repayment mortgage are also arranged over a fixed term, normally 25 years, but it is worth bearing in mind that itís possible to change the term afterwards by contacting your lender, though a small fee may have to be paid. Many people extend their repayment mortgage term to 30 or 35 years in order to reduce the monthly payments.

Benefits of a repayment mortgage

The main advantage of taking out a repayment mortgage is that it guarantees that your mortgage will be paid off by the end of the mortgage term. Also negative equity is less likely to be an issue as you will be reducing the amount owed each month. Finally as most properties rise in value, the increased equity in your property should make it easier for you to remortgage or get another mortgage should you move home.

Disadvantages of a repayment mortgage

The main disadvantage of a repayment mortgage compared to an endowment mortgage is that the monthly repayments are likely to be higher and possibly unaffordable for some though it is possible to overcome this problem by arranging a repayment mortgage where the monthly repayments are initially lower as they cover just the interest. With this sort of interest only repayment mortgage itís worth noting that monthly repayments will increase later.


Repayment mortgages are the only mortgage type that guarantees that your mortgage will be completely paid off at the end of the mortgage term though initial monthly payments may be higher than an endowment mortgage and possibly out of reach of some first time buyers. However, whatever your mortgage needs our professional mortgage advisers will be able to help.

Just fill in the repayment mortgage quick online enquiry form and one of our mortgage experts will get back to you.



Interest Only Mortgages »




Commercial Mortgages and Buy to let mortgages are not typically regulated by the FSA


We do not charge a fee for mortgage advice. A fee based option is available of typically 2% of the mortgage amount.
For example on a loan of £25,000 the fee would be £500

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