Repayment Mortgage

This is widely accepted as the most straightforward of the mortgage options. A single payment is made to your lender each month covering both the interest charged on the loan as well as the repayment of the outstanding capital. The mortgage like most others is portable should you move house, and providing you maintain the payments for the entire term of the mortgage you are guaranteed to repay the loan at the end of your selected period of borrowing.

Advantages:

The only option with a 100% guarantee that the loan will be repaid in full at the end of the term.

Disadvantages:

In the first few years of the loan the largest proportion of your regular monthly payment goes to pay off interest – the balance outstanding is hardly reduced at all. Separate life cover will be needed to repay the mortgage if you die, especially if you have any dependants. It can be slightly more expensive than the interest only options, even allowing for the investment vehicle payments.