Mortgage products & repayment
35 practice questions with explanations — 15 free to try
PassNova has 35 CeMAP — Mortgage Advice practice questions on Mortgage products & repayment, each with a clear explanation. A 15-question taster is free with no sign-up; the full bank is part of PassNova Premium. Updated for 2026.
Mortgage products & repayment: example questions & answers
2 worked examples with answers and explanations below. Try 15 CeMAP — Mortgage Advice questions free in the browser; the full 35-question Mortgage products & repayment bank is part of PassNova Premium.
What is the fundamental difference between a repayment (capital and interest) mortgage and an interest-only mortgage?
- AA repayment mortgage never charges interest
- BWith a repayment mortgage each payment reduces the capital as well as paying interest, whereas interest-only payments cover only interest✓
- COnly repayment mortgages can be secured on property
- DInterest-only mortgages always cost less in total
Answer: On a repayment mortgage each monthly payment includes both interest and a portion of capital, so the balance reduces to zero by the end of the term. On interest-only the capital remains outstanding and must be repaid separately at the end.
With an interest-only mortgage, how is the capital intended to be repaid at the end of the term?
- AIt never has to be repaid
- BIt is automatically added on to the borrower's next mortgage when they come to move home
- CThe outstanding capital is automatically written off by the lender at the end of the term
- DThrough a separate, credible repayment strategy or vehicle arranged by the borrower✓
Answer: Interest-only borrowers must have a credible plan to repay the outstanding capital, such as savings, investments or the sale of an asset. Lenders must check that such a strategy exists and is plausible.