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Mortgage repayment guide
Ways to pay back your mortgage
A handy guide to paying back your mortgage
Find out more about the different types of mortgages on offer and ways you can pay back your loan early - something which could save you thousands of pounds in interest payments.
Your home may be repossessed if you do not keep up repayments on your mortgage
Repayment mortgage
Capital and interest
- Your payments are made up of interest and capital.
- You gradually repay the loan over the term of your mortgage.
With a repayment mortgage you pay interest on the amount you borrowed and this is included in your monthly instalments. Make all your repayments and by the end of the mortgage term you'll have paid it all off.
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Interest only mortgage
For up to 75% loan to value mortgages
- Your payments only cover the interest on your loan.
- At the end of the mortgage you have to pay off the amount you borrowed.
With an interest-only mortgage, you'll have to make separate plans to pay off the sum you borrowed. This is normally done through an investment such as an endowment, ISA, or pension.
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A combination of both
Repayment and interest only
- Also known as a "part and part" or "part interest" mortgage.
- The interest-only cap of 75% loan to value (LTV) still applies to combined mortgages.
You can combine both repayment types on one mortgage. For example, you could use existing investment plans to cover the interest-only element and have the remainder on a repayment basis.
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A little goes a long way
It doesn't take much to wipe years off your mortgage – and save thousands of pounds in interest payments. This is because every time you repay some of what you owe, you are charged less interest, so more of your future payments go towards repaying the outstanding debt.
Be sure to save for a rainy day
When deciding if it’s right for you to make a mortgage overpayment, you should also consider saving some funds for those unexpected moments that life may throw at you.
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Be sure to save for a rainy day
Most mortgages have a limit or a maximum amount you can overpay before incurring an early repayment charge, make sure you understand all the details before making a payment.
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Need some help? Speak to our mortgage team
Call us
We're on hand to arrange a phone or video call with one of our qualified mortgage professionals. We can also help with any general queries about the process.
Call us on 0345 7212 600
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