Repayment Mortgage

Capital and Interest Mortgages

This is also called a capital and interest mortgage. The monthly mortgage payment is made as one payment but has two elements - capital and interest. The monthly payment includes the interest which has accrued on the outstanding amount as well as a capital payment which will reduce the amount owing. The aim is to reduce the amount owing to nil at the end of the mortgage term.

In the early years the monthly payment will be made up of mostly interest with a little being applied to capital owing. However as time goes by the amount outstanding will reduce so the amount of the monthly payment allocated to interest will reduce and the amount allocated to repayment of capital will increase.

Even though the mix of capital and interest changes slightly each month monthly payments are calculated to remain the same.

This type of mortgage does not need a repayment vehicle as the amount borrowed will be repaid from the monthly payments.

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Your home may be repossessed if you do not keep up repayments on your mortgage. Memigo Money provides information but does not sell or provide advice on mortgages or their suitability. There may be a fee for mortgage advice; the precise amount depends on your circumstances.

For adverse credit mortgages the overall cost for comparison will vary, the actual rate available will depend upon your circumstances. Ask for a personalised illustration.

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