How a repayment mortgage works. Every payment you make towards repaying the mortgage will make a small dent in the initial amount you borrowed to purchase the property.
Mortgage Services LeedsWhat is an Interest-Only Mortgage? With interest-only mortgages, your monthly payments are only used to pay off interest charges on your initial mortgage loan, and not the capital borrowed.
So, should you choose an interest-only mortgage or a repayment mortgage? Is an interest-only mortgage a better choice? Find out more in our article, below.
This can come in handy if you need the money earlier on in your ownership journey, such as if you want to put up some home improvements that will end up increasing the value of your home.
Over time, this arrangement will change as the interest owed decreases in line with the amount borrowed.
Pros of repayment mortgage loans. You might end up paying significantly less interest overall as what you owe the lender decreases every month.
It gives you greater control over your investments, as you can decide exactly how to save to repay the capital borrowed in the mortgage.
