Capital vs Interest

There are two essential components to any mortgage. The first is the capital, this being the sum of money you borrow to buy your new home. The second component is the interest, which is the money charged by your mortgage lender as payment for the service of providing the capital.

Capital is quoted as a fixed sum of money, whereas interest is always charged at a percentage of the amount borrowed. This percentage is known as the interest rate. Since it’s the interest rate which accounts for most of the cost of taking out a mortgage, it’s important to secure a deal that represents good value to you

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Mortgage Repayment Schemes

The first thing you should think about before applying for a mortgage is the kind of repayment scheme you prefer. You have two choices: put your monthly repayments towards paying off the interest and the capital, or just repay the interest. If you choose an interest-only mortgage you’ll need to work out how to repay the capital, which will become due at the end of your mortgage term.

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Beside you all the way

At Zing, we’re here to help you throughout your mortgage application. From your first enquiry through to completion - we’re here to make the whole process easier for you.

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