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You borrow a lump sum over a fixed period of time (usually 25 years, but it can be less). You pay the interest and some of the capital on a monthly basis to the lender. ADVANTAGES: The only way you can be 100% certain the loan will be repaid (provided you keep up with the repayments.) DISADVANTAGES:Only a small amount of capital is paid off in the early years. Your home may be repossessed if you do not keep up repayments on your mortgage. |
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