Important Notice: Our web hosting provider recently started charging us for additional visits, which was unexpected. In response, we're seeking donations. Depending on the situation, we may explore different monetization options for our Community and Expert Contributors. It's crucial to provide more returns for their expertise and offer more Expert Validated Answers or AI Validated Answers. Learn more about our hosting issue here.

What is the difference between an Interest-Only Mortgage and a Repayment Mortgage paying capital and interest?

April 26, 2017Capital difference interest-only mortgage paying repayment

0

Posted

What is the difference between an Interest-Only Mortgage and a Repayment Mortgage paying capital and interest?

1 Answer

0

Posted

• With an Interest-Only Mortgage your monthly payments will only cover the interest on the loan. Your payments will not pay off any of the capital that you have borrowed. You must arrange an adequate Repayment Vehicle (ie, savings plan or other form of investment) to pay off the loan at the end of the term.With a Repayment Mortgage your monthly payment will cover the interest on the loan and gradually pay off the capital you have borrowed.