Part and Part Mortgage Calculator
A Part and Part Mortgage is a combination of a repayment and interest-only mortgage. In this arrangement, part of your loan is repaid through monthly payments that cover both the interest and the principal (capital), while the other part is repaid only as interest. This type of mortgage allows for flexibility in managing monthly payments and is often used by borrowers who want lower monthly payments but also want to reduce the principal on part of the loan over time.
How Does a Part and Part Mortgage Work?
Repayment Part (Capital and Interest)
For this portion of the loan, your monthly payments include both the interest and the principal. This means you gradually pay off the loan balance over time. At the end of the mortgage term, the balance for this portion is fully repaid.
Interest-Only Part
For the other portion of the loan, you only make monthly payments to cover the interest, without reducing the principal. The original loan balance for this part remains unchanged throughout the mortgage term, and you’ll need to repay the full amount at the end of the term. This could be done through savings, investments, or other assets.
