| A repayment mortgage is where the monthly mortgage payments comprise of the interest and some of the capital. The loan amount will reduce each year. It is calculated that the loan will reduce to zero by the end of the term. The advantage is the certainty that the mortgage will be repaid at the end off the term. In the early years, very little of the capital is reduced but it accelerates over time.
It is important to note that the way lenders calculate the rate of interest varies from company to company and will make variations to the loan repayments. |
