Loan Repayment methods

Whichever type of loan repayment method you have, or want to switch to, you are required to pay interest charges each month to the Society. The two repayment methods are:

  • Capital Repayment: each month in addition to interest, you pay an amount which repays the capital gradually over the agreed loan period. In the early years of a repayment type loan, the payment is mostly interest, but as the loan is repaid, the interest element reduces and an increasing proportion of the monthly repayment is used to repay the capital. 
  • Interest Only: each month you pay the interest only, with the capital repaid at an agreed time in the future from an investment such as an ISA, pension or endowment policy, or from your own resources or the sale of the property. You are responsible for maintaining payments into any investment plan or life policy and for ensuring that it provides you with the level of cover you require. It is your responsibility to make arrangements to pay off the loan when the mortgage reaches the end of the agreed term. If you don’t you could lose your home. Here are some important things to know about managing your interest only mortgage.

Your home may be repossessed if you do not keep up payments on your mortgage.
Think carefully before securing other debts against your home.

If you want to change the current repayment method on your mortgage, or part of it, please click here to give us your account information and requirements and we will send you details by post of the effect that these changes will have on your mortgage. If you then want to go ahead with the change, we will ask you to fill in, sign and return a form so that we can consider your request.

If you need advice before making a decision, please contact our mortgage advisers on 01633 844350, who will be happy to discuss your requirements and make a recommendation. Alternatively, you can arrange to speak to an adviser by contacting us.


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