Repayment types include capital and interest repayment, where monthly payments reduce the loan balance over time; interest-only repayment, where only interest is paid monthly and the full loan amount is repaid at term end; and part and part repayment, which combines both methods, paying interest on part of the loan and reducing the balance on the rest.
- Exploring Mortgage Repayment Types: A Comprehensive Guide for UK Borrowers
Repayment Mortgage
Also known as a capital and interest, this is the most common type in the UK. With a repayment mortgage, your monthly payments include both the interest charged on the loan and a portion of the principal. Over time, your debt reduces until it is fully repaid at the end of the term. 
Interest-Only Mortgage
With an interest-only mortgage, your monthly payments cover only the interest charged on the loan. The principal amount remains the same throughout the term. However, you must have a separate investment vehicle, such as an endowment policy or an Individual Savings Account (ISA), to build up sufficient funds to repay the loan at the end of the term.