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Mortgage repayment

Options for repaying your mortgage

There are two main methods of repaying your mortgage: repayment and interest-only. Each has its own characteristics that you should consider before you decide which is best for you.

Repayment mortgage

With a repayment mortgage, your payments cover both the capital sum and the interest on your loan. It is calculated so that at the end of your mortgage term, the total amount you’ve borrowed, including interest, is paid in full (as long as you have made all of your payments in full and on time). Remember, your repayments may vary when interest rates change.

Benefits of a Repayment Mortgage

The main advantages of a repayment mortgage are:

  • It is simple and easy to understand.
  • It repays the loan in full at the end of the term, provided you have made all payments in full and on time.
  • With some repayment mortgages you can increase your monthly repayments to pay off the loan earlier than you originally agreed.

The term of a repayment mortgage affects your monthly payments: the shorter the term, the higher the payments. A mortgage term is normally between 5 and 35 years and is subject to our agreement. This will depend on your personal circumstances and your ability to repay the mortgage beyond normal retirement age.

Interest-only mortgage

With an interest-only mortgage, your payments only cover the interest on your mortgage. They don’t reduce the capital you owe, so you have to make separate provision to repay this at the end of the mortgage term. Therefore, you must have a suitable investment in place, which you must regularly review to make sure you will be able to repay your mortgage in full.

While our Mortgage Advisers are happy to answer your questions, we recommend that you get independent financial advice on the investment options available and the potential risks associated with them.

Mortgage Fees and charges

Certain fees and charges are part of the mortgage process, including:

  • An application fee, which allows you to secure a particular rate
  • Valuation fee (to determine the value of the property you want to buy)
  • Legal fees

There are other potential charges to consider, including:

  • Early Repayment Charge (this applies to some of our mortgages if you pay off all or some of your mortgage, or change mortgages, during a specified period)
  • Final Repayment Charge or ‘exit fee’ (this is applied when the mortgage is repaid in full and covers administration costs, for example for releasing Deeds)

For more information on fees and charges, please ask one of our Mortgage Advisers.

YOUR HOME MAY BE REPOSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

Remember that where the mortgage is denominated in a currency other than sterling, CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING EQUIVALENT OF THE DEBT.

For more information or to apply

Call us on +44 (0)1624 684305†

Security will be required against the property.

Terms and conditions apply to all mortgage products. We strongly recommend that you obtain your own independent tax advice before proceeding with an offshore mortgage.

Barclays Wealth will require a first legal charge over the property.

As a responsible lender, we only want you to borrow what you can afford, and in a way that is best for you. When considering your application, your financial circumstances will be assessed before we make a decision to lend money. And remember, if you should run into any financial difficulties, please contact us as soon as you become aware of them.

In all forms of advertising and marketing material where repayments are quoted, we will show clearly a typical Annual Percentage Rate (APR). We will also clearly indicate in all lending-related advertising issued in Jersey that we abide by the Code of Practice for Consumer Lending.

† Lines are open 7am to 8pm weekdays and 8am to 5pm weekends and UK bank holidays local time. Call charges may vary. Please check with your local telecoms provider. Calls may be recorded for training and security purposes.

The products and services described on this page are provided by the following companies which are part of Barclays Wealth, Barclays Bank PLC in England and Wales and Barclays Private Clients International Limited in the Isle of Man, Jersey and Guernsey. For further information on these companies and Barclays Wealth please read the Important Information.