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Repayment

This is the most common and widely accessible mortgage option. You’ll make monthly payments over an agreed term, gradually repaying both the loan amount (capital) and the interest.
With a repayment mortgage—also known as a capital repayment mortgage—you pay off a portion of the capital and interest each month. In the early years, your payments will mostly cover interest, but over time, a larger share will go toward reducing the capital.
Provided you make all payments in full and on time, your mortgage will be completely repaid by the end of the term.

With a repayment mortgage, you are guaranteed to repay the full mortgage by the end of your mortgage term, provided you make your repayments in full each month.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

Tracker Mortgages

• A tracker mortgage is a type of variable rate mortgage which tracks a nominated interest rate, usually the Bank of England base rate.
• The actual mortgage rate you pay will be at a set interest rate above or below the rate tracked.
  When the rate tracked goes up, your mortgage rate will go up by the same amount.
• And it will come down when the rate tracked comes down.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.

Variable Rate

The interest rate used here is the lender’s default rate, their Standard Variable Rate (SVR). As the name suggests, the rate applied can change at any time, meaning that your monthly repayments could do so too.

With this type of product there isn’t usually an early repayment charge with your lender, so you can move to another type of mortgage at any time and can potentially overpay your mortgage to pay it off faster and shorten the term. However, variable rate mortgages can potentially change if the Bank of England base rate rises or falls, making it harder to budget for your repayments. There can often be better and more cost-effective deals available in the marketplace.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.