Repayment Mortgages
Capital & Interest or Repayment Mortgage is the traditional, no risk method of repaying a mortgage.

Payments to the lender are made up of capital (this element reduces the debt) and interest (a charge that the lender makes against the money you owe to them).

Payments are designed to remain the same throughout the mortgage term, assuming there is no change in the interest rate, amount borrowed or mortgage term.

The graph shows the two payment elements to a capital & interest mortgage. In the early years the biggest payment is to interest (year one is £2,500) while payments to capital are about £1,000. Payments to each element are about the same at year 11. As each year passes the amount of capital being repaid rapidly increases and the charge to interest rapidly reduces.