Repayment mortgage A repayment mortgage is where you pay both the interest and part of the capital off every month. When the term comes to an end, you should be at a point where you have paid it all off and therefore you own your home. Interest-only mortgage This is what it says on the tin, interest-only mortgages mean you only pay the interest on the mortgage loan. This, however, means you will pay nothing off the capital (the amount you borrowed). These mortgages are becoming both unfavoured and unheard of. This is because as you are only paying off the interest, you will be left with a debt that could potentially stay with you without the means to repay it. This means that these mortgages are becoming much harder to come by as lenders and regulators are worried about homeowners being left with a huge debt and no way of reducing it. If you do get an interest-only mortgage, you will have to have a separate repayment plan. This plan will decide how you repay the original loan (capital) at the end of the mortgage term. Combination of repayment and interest-only mortgages There are mortgages out there which will allow you to split your mortgage repayments between both repayment and interest-only mortgage.