"Explained things in concise clear language. Easy manner - no pressure - created environment to make a decision."
Mr & Mrs M., Leeds, West Yorkshire
A Capital Repayment Mortgage (also known as Capital and Interest Mortgages), is one of the two ways in which a borrower can make repayments on their mortgage, the other being Interest Only.
Here we explain Capital Repayment Mortgages, how they work, their advantages and disadvantages, and how we can help.
Table of Contents:
Capital Repayment Mortgages, as we touched on above, are one of two ways that a borrower can repay their mortgage. The other method is an Interest Only Mortgage.
The Capital Repayment Mortgage is designed to repay both the capital sum and the interest charges over the selected term of the mortgage, usually 25 years.
Each monthly instalment will contain a portion of capital repayment and a portion of interest charged. In the early years of the mortgage, the amount of capital repaid will be very small, as most of the repayment will be interest charges. As the mortgage term progresses, a larger portion of the monthly instalment will be repaying your capital, until the final few years, when the bulk of the repayment will be paying back the capital borrowed.
Naturally, as you are paying both the capital sum and the interest charges with a Capital Repayment Mortgage, it does mean that it will be more expensive in the long term than an Interest Only mortgage.
However, a very important feature of the Capital Repayment Mortgage is that it is the only mortgage repayment type that guarantees your mortgage will be repaid at the end of the term, but this does of course depend on you meeting your contractual mortgage payments.
At Shire Direct, we understand that peoples circumstances and needs will differ. However, if you require the certainty that your Mortgage will be paid off at the end of the term, then the Capital Repayment mortgage will guarantee that it is.
So, hopefully we've managed to explain and answer any initial questions you may have had regarding Capital Repayment Mortgages and capital repayments. If you are thinking of applying for a mortgage or remortgage, and you are uncertain as to the benefits of a capital repayment mortgage over an interest only option, then why not give us a call on Freephone 08000 282 281, or contact us online anytime. Whatever your circumstances and needs are, we'll carefully listen and assess your requirements in a friendly and helpful way. Service and advice always come first at Shire Direct. So get in touch with us now, you'll be glad you did!
The overall cost for comparison is 9.8% APR.
The actual rate available will depend upon your circumstances. Ask for a personalised illustration. APR variable and based on a usual case. Most customers are likely to receive a lower rate or the same rate as our overall cost for comparison rate - learn more about APR.
There are no upfront broker fees.
However, a fee may be charged on successful completion. An indication is that on conforming cases (straightforward applications with no or minimal adverse credit) a fee may be charged of up to 1% of the amount advanced, typically £795 and will depend on your circumstances.
For non-conforming cases (where case research and processing may be more complex due to adverse credit or unusual circumstances), a fee may be charged of up to 3% of the amount advanced, typically £1,995.
THINK CAREFULLY BEFORE
SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED
IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Adding existing debt to your mortgage will increase the repayment term and overall cost.
Are you worried and becoming stressed because you are having problems getting a mortgage or remortgage? Worry and stress no more! Here at Shire Direct we provide tailor made mortgage solutions to suit you, and can usually help with all kinds of circumstances including...
Remember, we're here to help, and would love to hear from you!
Shire Direct and Shire Direct Mortgages are trading styles of Shire Processing Centre Limited which is
Authorised and regulated by the Financial Services Authority in respect of regulated mortgage products and general insurances.
Registered No: 302389. Commercial funding and Secured Loans are not regulated by the FSA.
Licensed Credit Brokers. Consumer Credit Licence Number: 349999.
Shire Processing Centre Limited is registered under the provisions of the Data Protection Act by the Information Commissioners Office: Registration No: Z6795249. Registered in England & Wales. Company number: 2732202. Telephone calls may be recorded for training, monitoring and security purposes. All applicants must be aged 18-years or over.
