Details or Sample:
Understanding Mortgage Terms: Repayment Mortgages

Repayment mortgages are a mortgage where every month part of the total amount borrowed is paid back along with interest due. Repayment mortgages are sometimes referred to as capital and interest mortgages which is a more descriptive name for them

Repayment mortgages can have fixed or variable interest rates and can include products like trackers and stepped mortgages. Current account and offset mortgages are also repayment mortgages.

Not all mortgages are repayment; it is also possible to get interest only mortgages, where the balance of the loan remains outstanding, and investment or endowment mortgages where an investment is paid into monthly to cover the amount borrowed.

In order to keep the payments uniform throughout the life of the mortgage, the proportion of the mortgage payment in the early years of the mortgage is made up primarily of interest, with very little of the payment being used for repayment purposes. This position is reversed towards the end of the life of the mortgage. This does mean that if a borrower were to settle a mortgage after a few years they would not have paid off very much of the loan amount

Repayment mortgages are popular as there is less risk than with an investment type mortgage. The only factor

Purchase this content for your website...

Pricing:
Usage:	$10	[Add to Cart]
Unique:	$15	[Add to Cart]
Full Rights:	$20	[Add to Cart]

Downloads: 0
Written by: Richard England
Available File Types:Text
Words: 269