Also known as a repayment mortgage this method of repaying a mortgage will guarantee that at the end of the mortgage term, as long as all payments have been made the mortgage will be paid off.

With this type of mortgage your monthly repayments contribute to paying off the amount borrowed plus the interest.

In the early years the monthly repayments you make will be made up of almost entirely interest and only a small amount of the capital is reduced. This is because the capital debt is high and will remain so for well over half the period of the repayment. Therefore it is not until later in the term when your monthly payments start contributing more towards the capital rather than the interest.

This is the most common form of repaying your mortgage in the UK as it is easy to understand and will guarantee the mortgage will be paid off at the end of the term.