What does Capital and Interest Mortgage mean?

Capital and Interest Mortgage is perhaps the most popular type of mortgage lending. Basically by contracting a mortgage, and especially capital and interest mortgage, the borrower agrees to make the monthly repayments as settled by the lender.

Usually for the first period of the repayments (which can be months, years, depending on the sum borrowed), the monthly installments repaid comprise only the interest and not part of the actual mortgage. As time passes, the repayment schedule is structured so that interest gets to be reduced and you will be paying a higher and higher portion towards your actual mortgage gradually. In order come out well with one’s calculations, and in order to avoid falling in the pit of debt, all you have to do is respect the monthly scheduled repayments no matter what.