Kelsey’s guide to mortgages and home loans, for beginners

NOT TRYING TO SELL YOU ANYTHING, JUST FREE INFORMATION THAT YOU MAY FIND HELPFUL

Repayment Mortgages

A repayment mortgage could be considered as the standard type of mortgage, the traditional home-buyers mortgage. With a repayment mortgage you pay off a small amount of the mortgage loan value every month, plus an amount of interest on the loan. As the loan progresses through the years the amount of the loan you repay each month goes up, and the proportion which is interest goes down – at the start of the mortgage period you are paying mainly interest and at the end of the mortgage you are paying mainly the loan.

The advantage of a repayment mortgage is that it is relatively risk free, in that at the end of the loan period you will have cleared your debt and own your property outright.

The standard loan period is usually 25 years, although more recently 30 year mortgages have also become popular.