Repayment Remortgages

If you are tired of your existing endowment policy, which requires you to pay only interest then a repayment remortgage is the best solution.

You might wonder why people would want to switch from an interest only form of payment to a repayment remortgage.

The answer lies in the fact that most borrowers are anxious because they are unsure if their investments will be sufficient to cover the exorbitant capital to be paid off at the end of the remortgage tenure.

This is why a repayment remortgage is more sensible as it offers peace of mind and a more balanced method of monthly payments.

Are Repayment Remortages Risky?

Once the tenure of an endowment remortgage ends, the capital to be paid can be huge. Most borrowers cannot meet this huge requirement and are often forced to sell their homes or worse, opt for foreclosure!

This is where a repayment remortgage can help because it cuts back the risk of paying such a high amount significantly.

Given the fact that most endowment remortgage plans tend to shortfall in their desired targets, this poses a considerable amount of risk.

Numerous investors in endowment remortgages have received warning letters stating that their endowment policy is not sufficient to cover the capital requirements once the remortgage tenure ends. This is a scary thought and is best kept at bay with a repayment remortgage.

What is a Repayment Remortgage?

In the case of repayment remortgage, instead of paying only the interest component of the borrowed amount, you pay interest and a portion of the capital.

Thus, whilst the monthly payments are higher, it is worth it in the long-term perspective. Most endowment remortgages do not get much returns and are more expensive compared to repayment remortgages.

Since you are continuously making partial payments towards the borrowed capital in the case of repayment remortgages, the interest amount does not accumulate that much.

However, with endowment remortgage deals you end up paying much more interest in the long-term.

More Stability!

Most people opt for endowment remortgages thinking that it will save money every month. This money can then be used to invest in a new property purchase, for paying off existing debts and other purposes.

However, what most people don't realise is the fact that this is only a short term gain. In the long run, you end up paying much more than what you borrowed, because of the compounding interest figures.

Compare this with a repayment remortgage plan and you quickly see the cost effectiveness in store for you.

Find a broker or lender that can offer you affordable, flexible repayment remortgage deals, which perfectly fit in to your unique, individual financial requirements.

If you are not sure whether a repayment remortgage is right for you, expert brokers and financial consultants can suggest and guide you in finding the best repayment remortgage deal available in the UK.

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