REPAYMENT MORTGAGE Meaning and
Definition
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A repayment mortgage is a type of mortgage loan in which the borrower agrees to repay the amount borrowed, along with the accruing interest, over a specified period of time. This type of mortgage is also commonly referred to as a capital and interest mortgage.
The repayment mortgage is structured in such a way that the monthly payments made by the borrower include both the principal amount borrowed and the interest charged on that amount. As the borrower continues to make regular payments, the outstanding loan balance gradually reduces, and the interest charged on the loan also decreases over time.
The repayment mortgage differs from an interest-only mortgage, where the monthly payments made by the borrower only cover the accruing interest on the loan, and the principal amount borrowed remains unchanged. In a repayment mortgage, the goal is to fully pay off the loan by the end of the agreed-upon term.
Repayment mortgages are popular among homeowners as they offer a structured way to steadily reduce the debt, build equity in the property, and eventually own it outright. The fixed monthly payment schedule provides clarity and ensures that the borrower is making progress towards becoming debt-free.
Overall, a repayment mortgage is a type of loan where the borrower makes regular payments that include both the principal and the interest, with the goal of fully repaying the loan over a specified period of time.
Common Misspellings for REPAYMENT MORTGAGE
- eepayment mortgage
- depayment mortgage
- fepayment mortgage
- tepayment mortgage
- 5epayment mortgage
- 4epayment mortgage
- rwpayment mortgage
- rspayment mortgage
- rdpayment mortgage
- rrpayment mortgage
- r4payment mortgage
- r3payment mortgage
- reoayment mortgage
- relayment mortgage
- re0ayment mortgage
- repzyment mortgage
- repsyment mortgage
- repwyment mortgage
- repqyment mortgage
- repatment mortgage
Etymology of REPAYMENT MORTGAGE
The word "repayment mortgage" is a compound term that combines the words "repayment" and "mortgage".
- The term "repayment" comes from the Old French word "repairoir", which means to "repair" or "make amends". Over time, it evolved to "repaiement" in Middle French and eventually "repayment" in English.
- The word "mortgage" comes from a combination of two Old French terms: "mort", meaning "dead", and "gage", meaning "pledge". In medieval times, a mortgage was a legal agreement where the borrower pledged a property as security, which would be forfeited if they failed to repay the loan.
When combined, "repayment mortgage" refers to a type of mortgage where the borrower makes regular payments that include both the principal and interest over a set term until the loan is fully repaid.
