Repaying back the mortgage forms a very important part of your mortgage agreement. This is because if you are unable to do so on time then you risk losing your house or property submitted by you as collateral.

A mortgage is a tool which allows you to take a loan against collateral deposited by you with the lender. The value of the collateral will decide the amount which can be provided to you as mortgage. The general process involved with mortgages will require you to first shop around in the market looking for apt lenders. The most sought criteria while doing this exercise would be to be on the lookout for lenders offering the mortgage at the lowest possible rate. Once you have finalized the lender you then initiate the process of filing the application form along with the desired documentations. Once the lender scrutinizes your documents and validates their authenticity he then agrees to release the desired amount in the form of mortgage.

When deciding on the terms and conditions for the mortgage the rate of interest and the repayment tenure are to be decided upon. The interest rate may be fixed for the entire tenure which subsequently translates into fixed repayment installments. The other option available is in the form of variable interest rates where the rate applicable to your mortgage depends on the current interest rate for every month. When it comes to fixing the repayment schedule for your mortgage you are generally provided with the following options:

1. Equal payments: this type of a repayment schedule is undoubtedly the most simple and the most common scheme. Herein the borrower is expected to make a fixed amount of installment payments which are spread throughout the mortgage tenure. The installment is composed of the amount due in the form of the principal amount as well as the interest earned upon the amount. All these installments require the lender to pay the same predefined amount.
2. Equal payment along with a subsequent balloon payment: in this type of repayment schedule the lender provides you with the opportunity to make equal monthly installments for a short duration of time and not the entire tenure of the mortgage. Once you are through with the monthly installments then you are not required to make any other payment and in turn you pay the remaining loan amount in the form of a balloon payment right at the end of the mortgage period. This type of repayment does have an advantage too as during the time when you do not pay any installments you have good cash flow with you but at the same time the large balloon payment at the end is capable of toppling your finances all over.
   
3. Interest only payment along with a final balloon payment: in this type of payment the borrower is expected to pay only the interest charges in the form of equal monthly installments while the principal amount loaned to the borrower will be repaid by him in the form of a balloon payment in one single go right at the end of the tenure of the mortgage.
4. Endowment mortgage: in this case of a mortgage the repayment of the mortgage is done by utilizing the proceeds of an endowment policy. To utilize an endowment mortgage one can make use of several types of mortgages which include a pension plan policy or a personal equity plan.

Presence of these various types of mortgage repayment plans makes it very easy and convenient for the borrower to choose and pick the best suiting plan according to his needs and capabilities. The decision has to be made very rationally as if you default with your payments you run into the risk of losing your collateral to the lender.