Capital and Interest Remortgages
What is a Repayment Remortgage
Repayment Remortgages are where the remortgage applicant is responsible for repaying the capital (the amount borrowed) as well as the interest (the interest charged on the mortgage debt).
In essence the entire debt and accrued interest are decreased on a monthly basis. Therefore by the end of the remortgage term, the debt will have been repaid in full.
This means that borrowers do not have to rely on having any additional savings in order to clear the remortgage loan, unlike an interest only remortgage.
Advantages of a Repayment Remortgage
-
Most repayment remortgages enable the applicant to make flexible mortgage repayments
-
A repayment mortgage covers both the capital and interest on the loan through your monthly repayments
-
No other repayment vehicle is required. However your remortgage lender may insist on life insurance and other protection products.
Disadvantages of a Repayment Remortgage
- The sum paid per calendar month is larger than the Interest Only option.