Switching to a repayment mortgage could save money in the long run.

If you can afford to switch to a repayment mortgage you could save thousands of pounds over the mortgage term. With the low Bank of England base rate there are many competitive deals with low interest rates that could allow you to repay some of your loan each month. Call Deal Direct for advice on all your mortgage options.

There are also flexible mortgages that allow you to pay more than the interest payments when you are able to. Some flexible mortgages also allow you to underpay for a period if you have made enough overpayments. This could allow you the flexibility to pay off more of your loan when interest rates are low and less when interest rates are high whilst still maintaining your monthly payments.

A repayment mortgage simply includes repayment of the capital loan as well as the interest, so that the amount you have borrowed reduces throughout the term. An advantage of this is that you are more likely to increase the equity in your property even in a difficult housing market because you will be gradually reducing the mortgage balance each month.

Initially the majority of mortgage repayments are taken up by the interest but in time more of the the capital loan is paid and the equity in your home increases. For example if you had a 25 year repayment mortgage at 5% and paid off £100 of the capital each month you could save more than £25,000 over the lifetime of the mortgage.

If you are interested in comparing this type of mortgage or any other products in the market, give us a call at Deal Direct. We can give you impartial advice and source the best products in the market.