Interest Only Mortgages

Find the best interest only mortgage for your circumstances

See whether you can save money on your mortgage using our independent service or you can call us on 0117 980 7743 (8.30am to 6pm – Monday to Friday)

 

Get A Great Mortgage Quote!

Step 1 of 3

Compare Interest Only Mortgages

In the last 12 months there has been a significant improvement by lenders providing flexible interest only lending options.

An interest only mortgage will essentially allow you to only repay the interest that is owed each month on your mortgage.

Lenders will expect you to have a repayment strategy in place e.g. putting savings into an acceptable  savings vehicle, or sale of property in order that you can meet the future repayment of capital required on the mortgage redemption date.

Independent advice on interest only mortgages

If you are looking for independent advice on your mortgage options and you are considering interest only then please complete our mortgage enquiry form and we will call you back.

Independent Mortgage Advice

An interest only mortgage will essentially allow you to only repay the interest that is owed each month on your mortgage. Lenders will expect you to have a repayment strategy in place. What is acceptable as a repayment strategy will differ from lender to lender.

Examples include:

  • Sale of the mortgaged property
  • An acceptable savings vehicle such an ISA or tax free cash from a pension plan
  • Sale of an investment property

Mortgage lenders who provide interest only options will have different rules on this.

Typically lenders will go up to 75% loan to value.

Some will operate on what is called a part and part basis e.g. 50% of the mortgage loan on an interest only basis and 25% on a capital repayment basis.

It will depend on your situation.

Lenders will want to be comfortable that you can afford to pay off the mortgage at the end of the loan term. So typically you will need to have at least 25% equity in your home. The new lender will also as with any mortgage review your income and previous borrowing record before making an offer.

With your current mortgage it is important to check to see if there are any early redemption charges if you move your mortgage to a new lender.

The good news is that in the last 12 months the options for people age 60+ for interest only mortgages has improved significantly with many lenders bringing out flexible products for older borrowers.

For example Post Office have brought out a retirement link mortgage which allows borrowers to take out a mortgage on an interest only basis up to age 80.

 

 

Interest Only Residential Mortgages

Type
Fixed
Initial Term
2 Years
Initial Interest Rate
2.54%
Reverts to 4.04%
Max LTV
60%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
2 Years
Initial Interest Rate
2.59%
Reverts to 4.04%
Max LTV
75%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
5 Years
Initial Interest Rate
2.54%
Reverts to 4.04%
Max LTV
60%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.40% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
5 Years
Initial Interest Rate
2.64%
Reverts to 4.04%
Max LTV
75%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.50% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
2 Years
Initial Interest Rate
2.64%
Reverts to 4.04%
Max LTV
80%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.80% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
5 Years
Initial Interest Rate
2.69%
Reverts to 4.04%
Max LTV
80%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.50% APRC. This is the cost of the mortgage over the full term.

Type
Fixed
Initial Term
5 Years
Initial Interest Rate
2.74%
Reverts to 4.04%
Max LTV
85%
Product Fee
Yes

More info

Call First Direct FREE on 0808 296 5500

Early redemption charges may apply. Overall Cost for Comparison 3.50% APRC. This is the cost of the mortgage over the full term.

Interest Only Offset Mortgages

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE