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Residential Mortgages

The Basics

A mortgage is one of the largest single transactions in most people's lives. Buying a property can be a stressful and time consuming experience, although nowadays the financing of a mortgage is a case of finding and selecting the most suitable deal, rather than simply accepting a lender's offer.

There remain two main methods of repaying a mortgage loan, and it is possible to set up the mortgage on a 'part repayment and part interest only' basis. A description of these methods is provided below.
House Sketch

Repayment (Capital & Interest) Mortgages

Under a repayment mortgage your monthly repayments consist of both interest and capital hence, over time, the amount of money you actually owe will decrease. In the early years your repayments will be mainly interest and therefore the capital outstanding will reduce slowly in the early years.

Whilst this method ensures that the mortgage is repaid at the end of the term providing all payments are made on time and in full, it is generally more expensive at the start.

Interest Only Mortgages

As their name suggests, with an interest only mortgage you only repay the interest on the mortgage. At the end of the term the capital is still outstanding. Therefore you will usually need to take out some kind of investment policy to save up enough money to repay the mortgage at the end of the term.


There are several terms used to describe the way you pay interest on a mortgage, and the main products that are currently available are shown below:

  • Standard Variable Rate (SVR)

  • Fixed Rate

  • Discount

  • Tracker

Our specialist mortgage consultants will be happy to explain your options in more detail, or provide you with an illustration. They can be contacted on 01263 514078.

Hoyl Independent Advisers Limited provides whole of market advice. Mortgage applications are subject to status and fees may be payable.

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