Post Pic

How do I repay the Mortgage?

You can choose to pay your mortgage back in on of the following ways:

  • Repayment Ė your monthly payment is split between paying off the loan and paying off the interest charges on the loan.
  • Interest Only Ė your monthly payment pays only the interest charges on the loan, and you must arrange some other way to repay the actual loan.
  • A combination of repayment and interest only.


Most people will take out a mortgage for 20 to 30 years so that it is affordable.† You can choose a term to suit you as long as the lender agrees you can afford it.

With a repayment mortgage over a shorter term, youíll have higher monthly payments but pay less in total.† With a longer term, youíll pay less each month but more in total.

With an interest-only mortgage you pay the same each month to the lender no matter how long the term is.† Remember this only pays the interest and not the loan itself.

Itís not a good idea to have a mortgage term that continues past retirement age unless you are sure that you will be able to afford the payments then.


How to repay your mortgage.

You can choose to pay your mortgage back in one of the following ways:

  • Repayment.
  • Interest Only.
  • A combination of repayment and interest only.
  • The payments you make to the lender every month reduce the amount you owe as well as paying the interest on the loan.† So each month you pay off a small part of your mortgage.

    Itís a simple, clear approach Ė you can see your loan getting smaller.† If you make all the agreed payments, the loan will be paid off in full by the end of the mortgage term.

    However, in the early years your payments will be mainly interest, so if you want to repay the mortgage or move house, youíll find that the amount you owe wonít have gone down by very much.

    As the name suggests, your monthly payment only pays the interest charges on your loan Ė you donít reduce the loan itself.† Because you are only paying off the interest your monthly payments will be lower than an equivalent repayment loan.† It is very important that you arrange some other form of repaying the whole loan at then end of the term, for example through an investment or savings plan.

    If you are thinking of getting an interest-only mortgage
    Your main option is to save regularly so that you build up a lump sum that will pay off the loan at the end of the term.† You should check the progress of the plan regularly.† If it does not grow as expected, you will have a shortfall and you will need to think about further ways of making up the difference.

    Before taking out the mortgage, you agree with the lender how the loan will be split between the two ways of paying it back.


Simply Mortgages
62 High Street
LL57 1NR

Tel: 01248 371088


Legal disclaimer

Simply Mortgages is authorised and regulated by the Financial Conduct Authority.
Your home may be repossessed if you do not keep up repayments on your mortgage. Some Buy To Lets are not regulated by the Financial Conduct Authority.