Scope: UK-wide; eligibility and product terms vary. Use current official guidance and qualified advice for decisions involving finance, tax or legal rights.
Two separate choices to understand
How a mortgage balance is repaid is different from whether its interest rate is fixed or variable. It is possible to discuss both in the same conversation and confuse them. Ask the adviser to explain the repayment method and the rate arrangement as separate parts of the product.
A repayment mortgage
Regular payments include interest and repayment of part of the borrowed capital. If the agreed payments are made as required throughout the term, the loan is intended to be cleared at its end. The split between interest and capital changes over the life of the mortgage, so an early payment does not reduce the balance by the full amount paid.
An interest-only mortgage
The regular payment covers interest rather than paying down the capital in the usual way. The outstanding capital still needs to be repaid, typically at the end of the term under the agreed arrangement. A credible repayment plan is therefore central; a smaller regular payment does not mean the underlying debt has gone away.
Compare obligations, not just monthly figures
Ask what will be owed at different points and what happens if the proposed repayment plan does not produce the expected funds. Understand how the lender assesses the arrangement and what evidence is required. Do not assume the same products or criteria are available to every borrower.
Before choosing
Request an explanation using the actual amount, term and product you are considering. Consider how the commitment fits retirement, changes in income and other financial plans. If you already have an interest-only mortgage and are concerned about repaying the capital, contact the lender and seek appropriate guidance early rather than waiting until the term is close to ending.