What is the difference between an interest only mortgage
and a Repayment one ? With an Interest Only mortgage
your monthly payments pay off the-interest on your loan.
Alongside this payment you should also pay an amount
to an investment vehicle such as an Endowment Policy,
ISA or Pension which would mature to pay off your outstanding
capital at the end of the chosen loan term.
With a Repayment loan your monthly repayments pay off
some of the capital and some of the-interest each month.
This reduces your overall balance over time. At the
end of your chosen term you will not need to use the
proceeds of any insurance policy or other investment
to repay the outstanding balance.
You should speak to an independent financial advisor
who can help advise you what is best for your own personal
circumstances.
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the Financial Services Act 1986. You are advised to take appropriate
professional and legal advice before entering into any binding
contracts.
