Repayment Home Mortgages

What are repayment home mortgages, sometimes referred to as straight repayment mortgages?

With all home mortgages there are two payments, one to repay the initial capital lent, and the interest upon that capital. As the name suggests repayment home mortgages steadily repay both the interest and the capital simultaneously.

Eventually after the 25 year term the entire capital has been repaid and no further repayments are required. Repayment home mortgages offer greater peace of mind than endowment home mortgages as you are assured that the capital loaned will be repaid at the completion of the term, similar to a bank loan.

The drawback of repayment home mortgages are that they tend to be slightly more expensive than endowment home mortgages as you do not get interest on the money you pay against the capital loaned, but you are guaranteed that it will be repaid at the end of the term.

The decision as to which type of home mortgage you choose is up to the individual but if the knowledge that your payments will repay your home mortgage assists you in sleeping at night then this is the type of mortgage for you. Repayment home mortgages can be tracker home mortgages, fixed rate mortgages, capped mortgage or standard variable mortgages, these terms all refer to the way that the interest portion is repaid, not the capital.