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Mortgage Advice Bureau (Holdings) Plc

Different types of mortgages explained

If choosing the right mortgage type is making your head hurt, then don’t worry, you’re not the only one.

With so many different mortgages to choose from, it can be confusing knowing which is the right one for you and your circumstance.

That’s why we’ve explained all the different mortgage types in the most straightforward way to help you understand the difference and have an idea of which might be right for you.

Repayment mortgage

Every month you will pay back some of the money you borrowed, as well as the interest. At the end of your mortgage term, assuming you have met all the mortgage payments, you would’ve paid off your mortgage in full.

Interest-only mortgage

Our guide explains the whole process step by step, right from how to get yourself mortgage ready, through to Help to Buy schemes.

You only pay the interest each month, not the capital. This means your payments will be lower but the overall amount you borrowed will still be outstanding at the end of the mortgage term. If you choose this mortgage then you need to have credible arrangements to pay off the mortgage.

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.