If choosing the right mortgage type is making your head hurt, then don’t worry, you’re not the only one.
With so many different types of mortgages available to choose from, it can be confusing knowing which is the right one for you and your circumstance. That's why our Resi Finance team have put together this essential guide, to help you stay ahead of the mortgage jargon.
What types of mortgages are there?
From fixed rate and tracker rate to interest-only, there is a wide range of mortgage types to choose from. Each has its own advantages and disadvantages, but all too often the jargon you encounter makes it difficult to understand the difference - or have an idea of which might be right for you. Fortunately, we're here to explain all the different types of mortgage in the most straightforward way possible.
Repayment mortgage
Every month you will pay back some of the money you borrowed, as well as the interest. At the end of your mortgage term, assuming you have met all the mortgage payments, you will have paid off your mortgage in full.
Interest-only mortgage
You only pay the interest each month, not the capital. This means your payments will be lower but the overall amount you borrowed will still be outstanding at the end of the mortgage term. If you choose this mortgage then you need to have credible arrangements to pay off the mortgage.
