What Is A Capital Repayment Mortgage?
A capital repayment mortgage is an arrangement where your monthly repayment includes the interest and a part of the capital borrowed. It is the most common mortgage type borrowers choose in the UK. When the mortgage term ends (ideally in 25 to 35 years in the UK), you fully repay your mortgage and own your property outright. More than 90% of residential borrowers in the UK choose this mortgage as it guarantees debt-free ownership. If you are still wondering, "What is a capital repayment mortgage?" our mortgage experts in Harrow have created this quick guide to help you understand how it works and choose the right mortgage for your needs. How does a capital repayment mortgage work? In this arrangement, every payment you make has two parts: the interest and the capital. During the initial years, the interest takes up a large chunk of your payment. Over time, your total mortgage balance (capital) will reduce. This is when a larger portion of your repayment will include the...