What are your Mortgage Repayment Options?

Our Mortgage repayment guide can help you once you have decided on the best mortgage repayment type for your circumstances. You will need to think about how you want to structure the mortgage repayment of the capital debt. Do you wish to take out a conventional repayment mortgage, or back your mortgage with an ISA or endowment policy or pension plan?

Alternatively you may wish to simply pay the lender the interest on the mortgage with a view to repaying the debt at some time in the future either from your own resources or maybe from the sale of the property.

Go Direct can help – we have removed the confusion, simply click on a mortgage repayment guide and read the advantages and disadvantages of each mortgage repayment type.

Your home may be repossessed if you do not keep up repayments on your mortgage


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How to Establish Your Best Mortgage Term

Once you establish which way to repay your mortgage you will need to calculate the minimum term your monthly budget will allow you to take the mortgage over. Most mortgage lenders will offer their full range of products to borrowers regardless of the term over which they choose to take the debt – for example, the best two-year fixed rates will be available whether you want to pay over 25 years or 40 years.

By stretching the mortgage term borrowers can bring down their initial monthly repayments. For example, someone taking out a £200,000 repayment loan at a rate of 5.7 per cent would have monthly repayments of £1,020.78 on a standard 25-year mortgage. In contrast, the same loan taken out over 35 years would reduce the monthly repayments to just £901.07 or down to £868.64 over a 40-year term.

Although a longer-term mortgage might improve affordability for young buyer’s, experts are warning borrowers to be aware of the consequences. It is important to be aware that the longer the mortgage term the larger the total interest payable will be, the borrowers should also review their mortgage arrangements regularly, shortening the term at a future date if possible.

Still Confused?

If you're still not sure after reading our mortgage repayment guide we have dedicated Mortgage advisors to help find the best mortgage for you.