Capital Repayment Mortgage

Capital Repayment Mortgage

Repayment Mortgages Enable Repaying The Amount Borrowed
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When you first look to find a mortgage or remortgage you will quickly discover that there are a plethora of mortgage types to choose from, that’s one reason to make sure you get proper advice and help in sorting your capital repayment mortgage. One of the most important decisions you will be required to make is how you would like to pay off the interest and/or the capital that you are borrowing from the lender. What we mean by that, is whether you want a capital and repayment mortgage or an interest only mortgage, or in some cases you can have a combination of both. Here at First Choice we understand that this decision can depend on a number of factors and we are here to keep you informed of what is available and help you make the right choice. Read on to get up to date with the basics on capital repayment mortgages or if you have already made your choice give us a call on 0800 298 3000 (landline) 0333 003 1505 (mobile) to get a no obligation free quote for a capital repayment mortgage from First Choice Finance, a mortgage broker with around 25 years experience of helping people find mortgage plans in many different circumstances.

Capital Repayment Mortgage Explained

A capital repayment mortgage is a mortgage where your monthly mortgage payments pay of both the interest on the mortgage as well as the capital of the amount you have borrowed on your mortgage. The amount you pay off each month is calculated so that at the end of your mortgage term, which can range from from 5-35 years, the capital originally borrowed along with the interest the bank added to the mortgage loan is paid off in full. Simply put, at the end of the mortgage term the property will be yours and only yours. Your capital repayment mortgage will be more costly than an interest only mortgage on a monthly basis but the major advantage is that your mortgage will run for a set term and upon the completion of the term your mortgage will have been repaid and you will be mortgage free.If you would like more information and to receive no obligation qualified mortgage advice please complete our short mortgage enquiry form or call to speak to one of our in house advisers on 0800 298 3000 (landline )or 0333 0031505 (mobile).

Benefits Of Opting For A Capital Repayment Mortgage

As mentioned earlier the most important advantage of a capital repayment mortgage is that upon completion of the mortgage term you will own the property but that isn`t the only upside for repayment mortgages. Let`s look at the benefits in more detail:

It is a simple straightforward method of repaying the mortgage, perhaps safer than its counterpart interest only mortgages as there is no big bill due at the end.

Over the duration of the mortgage term you may well end up paying back in total less than with a interest-only mortgage as you are actually decreasing the debt each month you make a payment

Provides more assurity than an interest only mortgage which relies on other market performances to make sure the investment vehicle you chose made enough capital.

As long as you make all of your payments and do not take out further secured borrowings when the mortgage term is finished you will own the property.

If you would like to have the advantages of capital and repayment mortgages explained to you in greater detail then call the above number and one of our advisors will be happy to help.

Potential Downsides Of Capital Repayment Mortgages

It is no secret that a capital and repayment mortgage is the most popular choice out there, but that doesn`t mean that it is ideal for all situations. Here are some of the disadvantages of a capital and repayment mortgage:

Your monthly payments will be higher each month than an interest only mortgage as you are paying off the capital on the mortgage as well as the interest

It is often the case that in the first few years of paying off the mortgage you work down paying the interest off the debt first. This means that if you wanted to pay off the mortgage early the majority of the debt will still remain

By opting for the safer option of a capital repayment mortgage you cannot benefit from your investment performing better than expected and leaving you with a bonus which could happen with an interest only mortgage

The right mortgage called for on a property can vary from person to person as people`s circumstances are always changing. A capital and repayment mortgage could be ideal for say a first time buyer mortgage as it would provide security that at the end of the mortgage term the property will belong to you. On the other hand if somebody is looking to purchase a buy to let property and has every intention of selling their investment before the mortgage is up then an interest only mortgage, rather than capital and repayment could provide the purchaser with lower monthly payments. The money saved could be used for home improvements to the property which may command a higher rental price. These are just two examples of why a capital repayment mortgage may or may not be right for a situation, there are many more. If you would like to talk your personal situation through in confidence with one of our knowledgeable advisers, fill in our online query form and we will help you come to a decision. We can also provide you with free, no obligation quotes for both repayment methods.

Capital Repayment Mortgage Calculator

We have many mortgage and loan calculators available to you to make sure you have a good idea of what the mortgage could cost you.

You can calculate your mortgage loan to value or calculate the equity available in your home using our loan to value calculators (ltv). You can compute loan to value for first and second mortgages.

Once you have established the loan to value you are working with then you can calculate the cost of the mortgage. By using our mortgage repayment calculator, where you input the amount of mortgage you wish to borrow (in pounds), how long you are looking to borrow the mortgage over (the term) and finally the rate at which you can borrow the money. Then all you have to do is click calculate and our mortgage calculator will tell you your monthly repayment for not only a capital and repayment mortgage but also, how much it would cost for interest only as well.

We want to provide you with all of the tools to make an informed decision, head over to our calculators page to get an idea of the cost of a mortgage. Once you are done, call us on the above numbers or fill in our online enquiry form and we can look to see what great deals could be available to you.

Calculate My Mortgage Loan To Value - Calculate the equity available in your home using our loan-to-value calculator. You can compute loan-to-value for first and second mortgages



Repayment Mortgage

Video transcript

A repayment mortgage will see you pay back your home loan complete balance as well as any accrued interest by the end of the capital and repayment mortgage term, but they can prove to be expensive, so First Choice Finance could save you a lot of money by finding the most suitable one for you from their panel of lenders.

By the end of this kind of loan, you`ll own your property outright, provided you have not taken out any second mortgages in the meantime, and so you can use the equity to fund a new house purchase, whereas with an interest-only mortgage, the sale price could end up going towards satisfying your initial mortgage, rather than the one on your next home. You may also look to rent the property out as a buy to let for income whilst you travel, or you could simply enjoy the income benefit of not having to pay a mortgage any more and lead a fuller social life.

The Financial Conduct Authority (FCA) has warned that the interest home loan option could prove to be a `ticking timebomb`, as one-in-ten people don`t have any plans in place to pay back what they owe on their current property. So it is essential to realise if you borrow in an interest only capacity the capital balance must be paid back in full at the end of the term.

With this in mind, the repayment mortgage may seem to be a better option, but because you`re paying back the initial capital too, you`ll pay need to find more each month compared to interest-only or part and part mortgages. Part and part mortgage and remortgages enable you to pay some capital back and some interest only and can be suitable for certain circumstances.

First Choice Finance can lighten the load of you trying to sort your mortgage out, as we`re a broker with access to lenders representative of the whole of the market, meaning that we could identify the best deal for your needs and hopefully it won`t cost you the Earth.

All you need to do to start is put a few details onto our online form and we`ll go through the options before aiming to source for you a no-obligation repayment mortgage offer, which you can walk away from for free if you don`t think it`s suitable. If you don`t want to move change your mortgage but do want to raise some funds we can also look into a second mortgage for you.

When you want to look into your options on repayment mortgages you can enquire at FirstChoiceFinance.co.uk, call 0800 298 3000 from a landline or dial 0333 003 1505 from a mobile.

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Mortgages & Remortgages
8.4% APRC.
Representative Example: Borrow £120,000 over 25 years at 5.99%, £778.86 pcm fixed for 3 years at 60% LTV. Then at 8.75%, £974.86 pcm, variable for 22 years. Total payable £286,416. Total cost of credit £166,416 (including: £985 broker fee, £999 lender fee & £164,432 interest)



Late repayment can cause you serious money problems. For help, go to moneyhelper.org.uk

Established In 1988. Company Registration Number 2316399. Authorised & Regulated By The Financial Conduct Authority (FCA). Firm Reference Number 302981. Mortgages & Homeowner Secured Loans Are Secured On Your Home. We Advice Upon & Arrange Mortgages & Loans. We Are Not A Lender.

First Choice Finance is a trading style of First Choice Funding Limited of 54, Wybersley Road, High Lane, Stockport, SK6 8HB. Copyright protected.

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