Repayment Methods

There are two methods of repaying a mortgage, capital and interest repayments and interest only. Interest only is not actually a way of paying the mortgage off, it simply allows a borrower to make separate provision to repay the capital. Capital and interest repayments make part payments each month to repay the capital balance with the remainder being interest payments.

It used to be fairly normal for mortgages to be on an interest only basis, with an endowment policy running alongside which would be used to repay the capital on the mortgage at the end of the term. However, with the endowment shortfall crisis this option is not popular at the moment and borrowers have reverted to capital and interest mortgages.

Crickett Finance can arrange either capital and interest or interest only mortgages. We cannot however arrange for savings/investment vehicles to run alongside an interest only mortgage.

Related pages:
Capital And Interest
Interest Only

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