What’s the difference between interest-only and repayment mortgages?

An interest-only mortgage is where you only pay off the interest accumulating on your mortgage. This can mean that your monthly repayments are lower, however you will need to eventually repay your mortgage once your mortgage term comes to an end.

The most common option is a repayment mortgage. This is where you have the security of paying off a bit of the loan as well as the interest with each monthly repayment. If all repayments are made, at the end of the term you will own the property outright.

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