YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Stevens Financial Services Ltd is an Appointed Representative of Personal Touch Financial Services Ltd, which is authorised and regulated by the Financial Services Authority. FSA no 409368. We normally do not charge a fee for Mortgage Advice, however, a fee paying option is available. Our typical fee is £299. Some of the above products/services may not or are not regulated by the Financial Services Authority. Stevens Financial Services Ltd. Registered in England. Co. Reg. No. 5045806
Stevens Financial Services Ltd
...with you every step of the way
Bank of England
Base Rate
5.00%
INTEREST ONLY MORTGAGE
As the name suggests, your monthly payment only pays the interest charges on your loan - you're not actually reducing the loan itself. This is why it's very important you arrange some other way to repay the loan at the end of the term; for example, through an investment or savings plan.
The pros: Because you're only paying off the interest, and not the loan itself, your monthly payments will be lower.
The cons: That debt is not going to go away. Throughout the life of the mortgage, you'll need to check your investment or savings plan is on track to repay your loan at the end of the term. If you can't repay it at the end of the term you could lose your home.
So, choosing a repayment or interest-only mortgage is one decision. The other will be to choose the interest-rate deal. In our Types of interest rate deals section we explain the main types of deals.
You can choose to pay your mortgage back in the following ways:
• Repayment • Interest-only • A combination of the two
You'll need to decide which is best for you – but don’t panic, we can help you ascertain which route is best for your circumstances.
REPAYMENT MORTGAGE
Every month, your payments to the lender go towards reducing the amount you owe as well as paying the interest they charge. So each month you're paying off a small part of your mortgage.
The pros: It's a simple, clear approach - you can see your loan getting smaller.
The cons: In the early years your payments will be mainly interest, so if you want to repay the mortgage or move house in the early years, you'll find that the amount you owe won't have gone down by very much.
