Return to the Mortgage Glossary Home to view explanations for all mortgage terms. What follows is the definition for the term Capital and Interest Mortgage as it relates to mortgages in the UK. Capital and Interest MortgageA Capital and Interest Mortgage is a mortgage product whereby the monthly repayments pay off both the money borrowed and the interest accrued on it. This is the most common form of mortgage, and means that at the end of the term (typically 25 years) you are guaranteed to have paid off the mortgage. An alternative type product is one that pays interest only, and you are required to pay money into an alternative financial product, such as an endowment, that should be worth enough at the end of the term, to pay off the initial loan.
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