A capital and interest mortgage is designed to do to things. The first is to be the interest, as the mortgage is usually over a long period of time, the average is 25 years, the amount of interest paid back to he mortgage company is often higher than the loan amount. In many cases two and half times as much. So if you mortgage £100,000 the true amount you can pay back is about £350,000 over the term of the mortgage. As you can see the vast majority of the total amount payable is the interest. This how the mortgage company makes it money. All mortgages in the UK have an interest rate and occur an interest rate.

The capital and interest mortgages or sometimes know as the repayment mortgage pays back both the interest and the capital. You own the property at the end of the mortgage term. This is often the most popular mortgage sold in the UK. AS the risk is very small and the customer always knows where they stand.

One point to consider is the term of the loan. If you double the monthly payments on a 25-years mortgage the term will not be 12.5 years, as you would expect, the term will in effect be just over 7 years.

Type Of Mortgages

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