This traditional type of mortgage remains popular as the loan is actually guaranteed to be repaid at the end of the term because your monthly repayments cover both capital and interest. However, the mortgage will only be guaranteed to be repaid providing that the monthly payments have been made in full and on time.

The advantages of this mortgage are the repayment guarantee described above and the diminished likelihood of negative equity, as compared to an interest only mortgage.  Negative equity is less likely because the mortgage reduces with each payment made, as opposed to an interest only mortgage, where the entire capital is repayable at the end of the term.

However a disadvantage is that as very little of the amount borrowed is paid off in the early years of the mortgage, if you wanted to move house again in those early years it is probable that you would be required to take out a new 20/25 year repayment mortgage, in order to make monthly repayment amounts manageable.