Repayment mortgage
A repayment mortgage is the standard mortgage type where each monthly payment covers interest plus some capital, reducing the balance over time.
Last verified: 10/03/2026
Definition
A repayment mortgage is a mortgage where your monthly payment is designed to repay both:
- the interest due, and
- some of the capital (the balance)
Over time, the balance reduces until it reaches zero at the end of the term (assuming the rate/terms used in the model).
Why it matters
The split between interest and capital changes over time. Early payments often contain more interest because the balance is higher.
Related terms
- Interest-only mortgage
- Amortisation