Remortgage repayment options

Once you have decided on the most suitable mortgage interest rate type, you can choose from one of the following repayment methods (all can be applied to any mortgage interest rate):

• A repayment (capital and interest) mortgage

  With a repayment (capital and interest) mortgage you repay both the interest and a small percentage of the borrowed capital each month.

  That means that your mortgage will be paid off in full (if you continue to meet your payments) at the end of the mortgage term.

• An interest only mortgage

  With interest only mortgages, your monthly payments only cover the interest on the amount you owe (so you're not reducing the outstanding sum each month). The idea is to put the money that you would have spent repaying your mortgage into an endowment or ISA policy.

• Part and part mortgage deals

  Part and part mortgage deals allow you to combine elements of both repayment and interest only mortgage deals.

If you're happy to accept the risk with an interest only, or part and part deal, we can only offer a you mortgage with these methods of repayment if you:

• have a suitable repayment plan, such as an ISA or an endowment policy
• are prepared to sell your house at the end of the mortgage term to repay the debt. If this is the case, you will need to have at least £150,000 equity in your existing property and we will only lend you 66% of the property value
• intend to sell a second property to repay the loan. The equity in the second property must be at least 120% of the new mortgage amount it is intended to cover.

Please note that in none of these circumstances is there a guarantee the mortgage will be repaid at the end of the term. If there are insufficient funds from these repayment methods you will have to find an alternative means of repaying the shortfall.