REPAYMENT OPTIONS

CAPITAL REPAYMENT

Also known as Capital and Interest mortgages, Capital Repayment mortgages are repaid through a monthly payment that combines part repayment of the capital sum you borrow with a payment towards the interest being charged on it.

In the early years of a Capital Repayment mortgage, mostly interest will be repaid with some capital paid off. As the term of the mortgage continues, the balance shifts – as the capital you pay gradually reduces the sum you owe, less interest is charged so an increasing proportion of your monthly payment repays the outstanding capital. At the end of the mortgage term, the whole of the capital has been repaid, and your property is yours.

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For Pension and Investments we act as introducers only.

INTEREST ONLY

An Interest Only mortgage consists of making monthly mortgage payments of two separate parts: the first part paying the interest on a borrowed sum to the lender, and the second part depositing a certain amount into savings, preferably through an investment plan. Boosted either by interest or a good rate of return on your investments, your savings should be designed to increase in value over the term of the mortgage, giving you enough money to repay the mortgage debt at the end of the mortgage term.

The three types of investment plan commonly used for savings are:

1. Individual Savings Accounts (ISAs).

2. Personal Pensions.

3. Endowments.

A reputable Financial Advisor, who is qualified to give advice on pensions and investments, will be able to give advice on the most suitable of these methods for your circumstances. They will calculate how much you need to pay into your selected investment plan to achieve the amount required at the end of the mortgage term. If you do not have a Financial Advisor, we will be happy to recommend one.