Repaying my mortgage
What do I have to repay?
How long can I take to repay my mortgage?
How can I repay my mortgage?
The repayment option
The interest only option
Investment Plans
Can I repay my mortgage at any time?
How do I make my monthly mortgage payments?
What is a Direct Debit?
How do I pay by Direct Debit?
The Direct Debit Guarantee
What do I have to repay?
Like any loan, with a mortgage you have to repay the capital (the amount you borrow) and, until it's repaid, pay interest on the capital outstanding.
How long can I take to repay my mortgage?
You can repay your mortgage over a term that suits you – from 1 to 35 years. When considering how long you want your mortgage to run, you should bear in mind how your income may change in the future as well as thinking about how you are planning to repay your mortgage. We will only consider lending to customers whose mortgage term ends before they reach 75.
If your loan carries an Early Repayment Charge, you will be unable to choose a term that finishes before the Early Repayment Charge period.
How can I repay the capital?
You can repay the amount you borrow:
- gradually ('repayment' option),
- as a lump sum at the end ('interest only' option),
- or, mix the two options and change between them during the mortgage term - there may be a charge if you wish to do this.
The repayment option
Part of your monthly payment covers the interest due each month and part goes towards repaying the capital. This usually means that by the end of the agreed term, the mortgage has been paid off completely. The longer your term, the lower your monthly payments will be, but you will pay more interest overall.
If all of your mortgage is on a repayment basis, the most you can apply to borrow is 90% of your home’s value (or the purchase price if lower), unless you are buying a new-build property or you’re switching your mortgage to us from another lender and borrowing more at the same time, in which case the most you can borrow is 80%.
The interest only option
You pay only the interest each month. The actual amount borrowed doesn't reduce during the life of the mortgage so you need to repay the full capital amount at the end of the mortgage term. Your monthly payments are less than with a repayment mortgage, but you will need to ensure that you have the money available at the end of the term to repay the capital.
If you cannot repay the loan at the end of the term, you will have to carry on making interest payments to C&G.
If you want to arrange all or part of your mortgage on an interest-only basis, the most you can apply to borrow is 75% of your home's value (or the purchase price if lower).
Investment plans
With an interest only loan most people take out some kind of investment plan so they can repay the capital at the end of the term. The most common of these are:
- Endowments
- Personal pension plans
- Individual savings accounts (ISAs)
If you already have investment plans running when you take out your mortgage, your financial adviser may say that the existing plans provide at least part of the cover you need and you don't have to start a new plan for the full amount of your mortgage.
If you do take out a new investment plan, the regular payments to the investment company will be separate from and in addition to your regular mortgage payments. It will be your responsibility to maintain these payments.
Can I repay my mortgage at any time?
When you make your final repayment you might have to pay an Early Repayment Charge. Find out more information about Early Repayment Charges.
How do I make my monthly mortgage payments?
The usual and easiest way of making your payments is by Direct Debit, and you'll be able to choose the mortgage payment date to suit you.
What is a Direct Debit?
A Direct Debit is similar to a standing order in that payments happen automatically every month, but it is much more flexible. For example, you don't have to fill in a new form every time your payment changes and, if you have more than one C&G mortgage loan, the payments for them can be collected as one single amount.
How do I pay by Direct Debit?
If you are taking out a new C&G mortgage, please complete and sign the Direct Debit instruction which is part of your mortgage application form.
If you already have a C&G mortgage and are borrowing more:
- you don't have to do anything if you already pay by Direct Debit. Payments for the new amount will be collected automatically under the existing arrangement they have with you,
- if you don't currently pay by Direct Debit, please complete the instruction and and return it with your application. Once your application is received payments for your existing loan(s) will be collected by this method even before you start repaying your additional borrowing (but you will receive notification before this is done. If appropriate, you will then be told when you should cancel any standing order instructions for your existing C&G loan(s).
The Direct Debit Guarantee
This guarantee is offered by all banks and building societies that take part in the Direct Debit scheme. The efficiency and security of the scheme is monitored and protected by your own bank or building society.
- If the amounts to be paid or the payment dates change, you will be notified four working days in advance of your account being debited or as otherwise agreed.
- If we make an error or your bank or building society, you are guaranteed a full and immediate refund from your branch of the amount paid.
- You can cancel a Direct Debit at any time by writing to your bank or building society. Please also send a copy of your letter to C&G who administers C&G mortgages on our behalf.
