What are Repayment Mortgages?

The main purpose of repayment mortgages is to pay back interest and capital in the same time. If the payments are done correctly and in time then by the end of the preset date everything will be paid off entirely. In the first years you’ll be paying off the interest and this might gradually increase as the time passes.

The positive side of repayment mortgages: if you continuously pay your debt then by the end of the mortgage you should have been paid of your debt in full. It will be less likely to suffer from negative equity because the mortgage balance will be falling gradually. The drawbacks if you happen to move in the early year when only just a fraction of the total mortgage has been paid off then it’s more likely that you’ll be needing a second mortgage just for paying of the first one.