What is the difference between a repayment mortgage and an interest only mortgage?

With a repayment mortgage, every monthly payment you make you’re paying off some of the capital amount borrowed, as well as the interest on the loan. This ultimately means that assuming all repayments are made on time as agreed, once the mortgage term comes to an end your mortgage will be fully repaid and you will own the property outright.

With an interest only mortgage, you are simply paying the interest on the amount you borrow. This means your monthly payments will be much lower than if it were a repayment mortgage, however at the end of the mortgage term you will still owe the lender the original loan amount borrowed and will not own the property outright.