Repayment Mortgages FAQ
What is a repayment mortgage?
With a repayment mortgage you'll repay the mortgage capital each month along with the interest, unlike interest only mortgages which allow borrowers to pay off just the interest on the loan each month.
Is a repayment mortgage right for me?
If you can afford to make the monthly repayments each month and you want to take steps to clear your mortgage debt then a repayment mortgage is suitable for you.
What are the benefits of a repayment mortgage?
The main benefit of repayment mortgages is that, because you are repaying both the mortgage and the interest, at the end of the mortgage term you will own the property outright. Repayment mortgages are also cheaper overall than interest only mortgages.
What are the downsides of repayment mortgages?
While repayment mortgages are cheaper overall, they can seem more expensive in the short term. Monthly repayments for repayment mortgages are obviously more expensive than for interest only mortgages as you're paying back not just the interest but also the actual debt.
What fees will I pay for a repayment mortgage?
When taking out a repayment mortgage you're likely to face an arrangement fee (which can be £2000 or more), a booking fee, a valuation fee and legal fees. However, it's worth noting that not all fees apply to all products.
How can I compare repayment mortgages?
Know Your Money's comprehensive comparison tables make it easy and straightforward to compare all repayment mortgages. They are free to use and allow you to sort products by fees, rates and overall costs.