Once your mortgage application has been accepted in principal, you may have the option of deciding how you repay the loan: on a ‘repayment’ basis, or on an ‘interest only’ basis.
Repayment mortgage
With a repayment mortgage, your monthly repayments cover both capital and interest on the loan.
As the term continues, the amount outstanding on the loan reduces so the full amount of the loan will have been repaid at the end of the term as long as you have made all your payments on time.
No other repayment vehicle is needed and it avoids the risk of investing (e.g. in the stock market).
If you remortgage, you may be tempted to extend the end repayment date in order to lower your monthly payments. However, this means that the amount you repay overall increases over time.
Interest only mortgages
With an interest-only mortgage, your payments to the lender cover only the interest on the loan (i.e. they do not repay any of the capital). The total amount of your debt does not reduce over time and the full amount of the loan still has to be repaid to the lender at the end of the term, so you will need to ensure you have that money ready.
So you can make this final payment, you can invest so that you generate enough capital to repay the loan at the end of the term. If you choose to invest, some investment vehicles can have tax advantages and when you move or remortgage, your investment vehicle can usually be reallocated to the new mortgage.
However, there is no guarantee that your chosen investment vehicle will grow sufficiently to repay your loan (although you can usually top up your contributions to investments as you go along if this looks likely to be the case).
Book a Free Initial Consultation
Speak with a qualified financial adviser to discuss your circumstances and explore your options. This initial meeting is free and without obligation.
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FAQ'S
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.
We offer a free no-obligation initial consultation, which will allow us to identify your financial planning needs and to determine what services are most suitable for you.
On this meeting, we will provide you with and discuss our Terms of Business brochure. This document clearly details our fees for all areas of advice we provide. We understand individuals’ have different needs and objectives and after our consultation we will be able to confirm our fees. At no point will any chargeable work be undertaken until you are made aware of any associated fees. We are always happy to answer any questions about how and when our fees are payable, however we may not be able to confirm the exact fee until we have completed an initial consultation.
Yes, of course. We welcome the opportunity for you to invite family or a third-party representative to come along to our meetings if you would like the presence of a familiar face. We endeavour to support you, so please make us aware of any additional requirements or provision you require prior to our meeting.
We can meet face to face at our offices in Bexley. Our address is Unit 34 The Hop Store, Old Bexley Business Park, 19 Bourne Road, Bexley, Kent, DA5 1LR.
We can also facilitate home meetings if required, or video and phone calls if this is more convenient for you
We provide a range of advice services, including mortgages & protection, investments, financial planning, retirement planning, and estate planning. If you wish to discuss your enquiry further, please feel free to call the team on 01322 958222.
Yes, Sidney Curtis Financial Limited is an appointed representative of Quilter Financial Services Limited, which is authorised and regulated by the Financial Conduct Authority (FCA) and is registered on the FCA register with Firm Reference Number 440703. Sidney Curtis Financial Limited is also registered on the FCA Register with Firm Reference Number 1052400.