Capital Rest Period

This is the regularity with which a Lender calculates the outstanding balance on mortgages, and hence the size of monthly repayments.

It is usually annually, monthly or daily.

With Capital and Interest mortgages this can be important; an annual interest calculation means that the borrower will pay interest on capital repayments that have been made in the course of that year.

In contrast a daily or monthly interest calculation means that the balance, and consequently the interest charged, will reduce with every capital repayment made.

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