Ok Mortgages - Mortgage Repayment Options

With so many options available, choosing the right one for your particular circumstances can be difficult but O.K Mortgages can help you choose.

Our Mortgage Consultants are trained to find the right repayment method to suit your particular circumstances. Contact Us to see how we can help.

Things to remember:
With a repayment mortgages you can see the amount you owe reduce. With the other types of mortgage you don't see any reduction because you are only paying off the interest.
With any of the 'investment' options (endowment, pension and ISA) you could get a lump sum, but on the other hand, its also possible there may not be enough to repay the full loan.
If you're increasing your mortgage, you may want to combine different types of repayment on your new mortgage depending on your circumstances. Our Mortgage Consultants will be happy to help.

Repayment Capital & Interest-
You pay off part of the amount you have borrowed, plus interest, month by month. You will need separate Life Assurance as it will not be included.
Disadvantages
No potential for cash lump sum
Not very flexible if you move home.
Advantages
Simplest option
You'll know when your mortgage will be paid off.
You can see the amount you owe reduce

Interest Only
You only pay the interest accrued each month. The capital never reduces i.e. if you borrow £100,000 in 25 years you will still owe £100,000. It is recommended to have one of the following methods of repayment set up to ensure you can repay the mortgage at the end of the term. However some people are quite prepared to make their own arrangements.

ISA-
An Individual Savings Account is set up to cover the capital amount of the loan. You pay only interest on the amount you borrow.
Disadvantages
May not give you large enough cash sum to pay off the loan.
Need separate life cover.
Advantages
Potential cash sum at the end of the term.
Easy to transfer ISA if you sell one property to buy another.
Tax-efficient savings.
OK Mortgages cannot offer advice on this area, but we work closley with local IFAs which we can refer you to.

Pension-
You only have to pay back the interest on the amount you borrow. A personal pension plan is setup to provide a tax-free lump sum designed to pay off the capital amount of the loan.
Disadvantages
May not give you a large enough cash sum to pay off the loan.
Need separate life cover.
Not suitable if you're in a company pension scheme.
May eat into funds you hoped to have for your retirement.
Advantages
Provides for your retirement at the same time as potentially paying off your mortgage.
You get tax relief on pension contributions.
Its easy to transfer the pension plan if you sell one property to buy another.
OK Mortgages cannot offer advice on this area, but we work closley with local IFAs which we can refer you to.

Endowment-
You only have to pay back the interest on the amount you borrow. You will need an endowment life policy set up to cover the capital amount of the loan when the policy matures.
Disadvantages
Your endowment policy may not grow enough to repay the loan in full.
If you cash your policy in early, you may not get back as much as you put in.
Due to recent changes in projected growth rates this option is likely to be expensive.
Advantages
Potential of a cash sum at the end of the term
Life assurance included
Endowment policy easily transferred if you sell one property to buy another.
OK Mortgages cannot offer advice on this area, but we work closley with local IFAs which we can refer you to.