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Mortgages Explained >
Capital repayment |
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A capital repayment mortgage is essentially quite simple you
have a payment that the lender wants you to make each month and
this payment is made up of the interest that is due that month
along with a small amount of capital.
As this continues through the term of the debt these small
amounts of capital slowly chip away at the overall mortgage and
in turn the debt reduces.
This process is quite slowl in the early years but as time goes
by the pace of the reduction steadily increases until the end of
the mortgage term the debt is repaid in full.
Capital repayment mortgages are very effective methods of
repaying a mortgage, owing to the certainty of repayment,
obviously subject to payments being maintained.
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