Common methods of mortgage repayment
 
Interest only - under this method the lender only charges the amount of interest due each month. The amount borrowed (the capital) never reduces during the term of the mortgage. It is therefore very important that the borrower has an investment product in place to ensure that the capital can be repaid. JAM Mortgages is not authorised to advise on investment products and recommends that you consult an Independent Financial Adviser on such matters.
 
Repayment - also known as Capital and Interest. Monthly mortgage payments are calculated to guarantee that all interest due and the capital borrowed will be repaid at the end of the mortgage term provided you keep up to date with repayments.
 
Part and part - it is possible to obtain a mortgage that is calculated partly on a repayment basis and partly on an interest only basis. It is very important that the borrower has an investment product in place to ensure that the capital borrowed on an interest only basis can be repaid. JAM Mortgages is not authorised to advise on investment products and recommends that you consult an Independent Financial Adviser on such matters.
 
Current account mortgage - these types of mortgage are like a normal bank account with a very big overdraft facility! You can use the account in the same way as a bank account provided you don't exceed your facility.
 
Offset mortgage - this is a normal mortgage with a linked savings account. The savings total is used to reduce the capital of the mortgage before interest is calculated.