A repayment mortgage is one where you pay the interest on the loan and repay a portion of the debt each month. This means that you will know, at the end of the month, that you will have enough money to pay back the loan. This can be a great thing as it means that you  have the confidence that you will pay back what you owe.

It can be great, having the peace of mind that you will be able to clear you debt at the end of the period. Those people who have interest only mortgages are not able to do that. They will have to put some money away every month in some sort of investment and hope that they will have enough to pay off their debt when the time comes.


A repayment mortgage is great for those people who are not very good at saving. They will not have to worry about making sure they have enough money put aside. They will just be automatically paying things off. It will mean that they are paying more money each month to their lender than people who have interest only accounts, but at the end of their mortgage period, they will have paid off the loan.

It can be tempting, if you are having to save the money yourself to put towards your mortgage, to borrow a bit every so often. You might need new things or want some spare money. However, if you keep getting used to dipping in to this account, then you could find that the money soon runs out and then you will have nothing left to pay your mortgage. It is really easy to do, but difficult to undo. Therefore deciding whether you want a repayment or interest only mortgage, is very important.

You need to not only think about which seems to make financial sense and will help you be better off, but also which will be best suited to your personality. You may find that the repayment mortgage will not only make sure that you do not spend the money you need to put aside to pay off the mortgage, but it will also give you peace of mind that the debt is slowly being whittled away.