CIS Mortgage

What Are My Mortgage Repayment Options?

We specialise in Mortgage Advice for Subcontractors paid via the Construction Industry Scheme (CIS)

Your home may be repossessed if you do not keep up repayments on your mortgage.

Table of Contents

1 Step 1
The internet is not a secure medium, and the privacy of your data cannot be guaranteed. Please tick how you would like us to contact you.

There are a number of different options when it comes to the types of mortgage available to you, but when it comes to paying your mortgage off, there are three main options.

  1. Repayment
  2. Interest-Only
  3. A combination of the above

If you choose to take out a repayment mortgage, you have to pay both the capital and the interest together for the duration of the mortgage term.

If you choose to take out an interest-only mortgage, you only pay the interest on a monthly basis. However, when your mortgage term ends, you will have to pay back the capital in one lump sum.

Your lender might also offer you a mortgage using a combination of both payment types, which could be tailored towards your personal circumstances.

Repayment Mortgage

Repayment mortgages are the most common types of mortgage available, and this is because once they have been paid off, that’s it, there is nothing more to pay. So long as you stick to your payment schedule, your house is yours after the final payment.

There are several types of repayment mortgages, including those that are on a fixed-rate and those that are on a variable rate. Needless to say, your payments will stay the same if you are on a fixed-rate mortgage, whereas on a variable-rate mortgage your payments might fluctuate if the lender, or Bank of England, alters the rate of interest. You can find out more by speaking to your lender, or by researching online the various types of mortgages available to you.

Interest-Only Mortgage

With an interest-only mortgage, you only pay back the interest owed each month rather than the capital. This can mean your repayments will be lower during the term of your mortgage, but you will need to have money saved up to make that final lump sum when the term ends. Your lender might ask you for evidence of a savings plan before offering you an interest-only mortgage, as they might turn you down if they don’t think you will be able to make that final payment.

What Mortgage Repayment Option Is Right For You?

For the majority of people, a repayment mortgage is the most appropriate choice, as there is the guarantee that the mortgage will be fully paid off by the end of its term. So, this might be the best choice for you, especially if you don’t want to risk not having enough money to pay off the lump sum of an interest-only mortgage.

If, however, you wanted to keep costs down in the short-term, you might consider an interest-only mortgage, especially if your chances of having savings in place by the end of the term were high. Alternatively, you could combine the two payment options, if the lender gave you that option.

To find out what repayment type is best for you based on your gross CIS income, speak to us today. We specialise in helping CIS contractors find the right mortgage.

Speak To An Expert

If you’re reading this as a Construction Industry Scheme (CIS) contractor, then you or your partner are probably struggling to find a mortgage right now. We can help.

We Say Yes To CIS