Repaying Your Mortgage
The main methods of repaying a mortgage are the Capital & Interest Repayment method, the Interest-Only method or a combination of both.
However because of the new mortgage regulations most lenders will now require the mortgage to be arranged on a capital and interest repayment basis.
Under this method, capital and interest payments are made each month and provided the repayments are maintained, the loan will gradually reduce over the mortgage term. During the early years the majority of your monthly payment will be made up of the interest element with little of the capital being repaid.
However in the later years the reverse is true, with a larger proportion of your mortgage repayment repaying the capital element.