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Encyclopedia > Repayment mortgage

A repayment mortgage is a term generally used in the UK to describe a mortgage in which the monthly repayments consist of repaying the capital amount borrowed as well as the accrued interest. Your mortgage statement, usually received annually, shows the amount borrowed decreases throughout the term. A mortgage is method of using property as security for the payment of a debt. ...

The big advantage of a repayment mortgage is that at the end of the mortgage term, you can be sure that the full amount of the debt has been repaid. It also removes the risk of having an investment, the performance of which is dependent on the stockmarket. You are less likely to suffer from negative equity because your mortgage balance will be reducing month on month.

As time moves on, your equity percentage in the property increases. But remember that in the early years, the bulk of the mortgage repayments consist of the interest component. So not much of the capital is actually paid off for some time.

  Results from FactBites:
Mortgage - Wikipedia, the free encyclopedia (3711 words)
At common law, a mortgage was a conveyance of land that on its face was absolute and conveyed a fee simple estate, but which was in fact conditional, and would be of no effect if certain conditions were not met --- usually, but not necessarily, the repayment of a debt to the original landowner.
Hence the word "mortgage," Law French for "dead pledge;" that is, it was absolute in form, and unlike a "live gage", was not conditionally dependent on its repayment solely from raising and selling crops or livestock, or of simply giving the fruits of crops and livestock coming from the land that was mortgaged.
In the UK a part repayment mortgage is quite common especially where the original mortgage was investment-backed and on moving house further borrowing is arranged on a capital and interest (repayment) basis.
Endowment mortgage - Wikipedia, the free encyclopedia (370 words)
An endowment mortgage is a mortgage arranged on an interest-only basis where the capital is intended to be repaid by one or more endowment policies.
The phrase endowment mortgage is used mainly in the UK by lenders and consumers to refer to this arrangement and is not a legal term.
Similariliy MIRAS (Mortgage Interest Releif At Source) made having a larger mortgage advantageous as the MIRAS refeif reduced as a repayment mortgage was repaid.
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