Ways to repay your mortgage

There are various ways to repay your mortgage. Here is a brief outline of the more popular repayment methods, and their advantages and disadvantages.

Repayment mortgage

How does it work?

You borrow a lump sum over a fixed period of time (usually 25 years, but it can be less). You pay the interest and some of the capital on a monthly basis to the lender.

ADVANTAGES: The only way you can be 100% certain the loan will be repaid (provided you keep up with the repayments.)

DISADVANTAGES:Only a small amount of capital is paid off in the early years.

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