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Interest Only Mortgage Hotline call now 0117 313 7780

What is your mortgage for?

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Details sort by initial rateLenderInitial rate Rate type Overall cost for comparisonMax LTVProduct feeMonthly cost Enquire
Initial rate: 1.12%
Rate type: Fixed Oct-2019
Monthly cost: £388.16 per month
Max LTV: 60%
Product fee: £1990.00
Overall cost for comparison: 3.8% APRC
Post Office logo 1.12% Fixed Oct-2019 3.8% APRC 60% £1990.00 £388.16 per month get quotes Call direct0808 178 6813
Initial rate: 1.12%
Rate type: Fixed Oct-2019
Monthly cost: £388.16 per month
Max LTV: 60%
Product fee: £1990.00
Overall cost for comparison: 3.8% APRC
Post Office logo 1.12% Fixed Oct-2019 3.8% APRC 60% £1990.00 £388.16 per month get quotes Call direct0808 178 6813
Initial rate: 1.19%
Rate type: Fixed Oct-2019
Monthly cost: £389.49 per month
Max LTV: 60%
Product fee: £1220.00
Overall cost for comparison: 3.8% APRC
Post Office logo 1.19% Fixed Oct-2019 3.8% APRC 60% £1220.00 £389.49 per month get quotes Call direct0808 178 6813
Initial rate: 1.19%
Rate type: Fixed Oct-2019
Monthly cost: £389.49 per month
Max LTV: 60%
Product fee: £1220.00
Overall cost for comparison: 3.8% APRC
Post Office logo 1.19% Fixed Oct-2019 3.8% APRC 60% £1220.00 £389.49 per month get quotes Call direct0808 178 6813
Initial rate: 1.19%
Rate type: Fixed Nov-2019
Monthly cost: £389.37 per month
Max LTV: 60%
Product fee: £1423.00
Overall cost for comparison: 3.5% APRC
NatWest logo 1.19% Fixed Nov-2019 3.5% APRC 60% £1423.00 £389.37 per month get quotes Call direct0800 158 2934
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Representative Example:

A repayment mortgage of £120,000 payable over 28 years and 1 month initially on a fixed rate for 2 years at 1.99% and then on the lender current variable rate of 3.69% (variable) for the remaining 26 years and 1 month would require 24 monthly payments of £465.20 and 312 monthly payments of £565.39 and one final payment of £565.19.

 

The total amount payable would be £189,357.67 made up of the loan amount plus interest (£68,161.67), booking fee (£999), completion fee (£30) and valuation fee (£197).

 

In this example the overall cost for comparison is 3.7% APRC representative.

 

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT

Interest Only Mortgages

Our Interest Only Mortgage Service - helping you make the right decision

Special features of what we offer include:

  • Whole of market service - we work with most UK lenders that operate on an interest only basis
  • Access to leading market mortgage rates
  • Access to exclusive loan deals not available on high street
  • Fast turnaround - speak to us today if you need to move quickly
  • We have lenders who will take into account previous defaults and missed payments 
  • Looking to raise additional finance on top of your existing mortgage or buy to let mortgage? - we have access to a range of finance solutions

To investigate your mortgage options call our mortgage team on 0117 313 7780 or fill in our call back form.Mortgage Advice Button 1

As the name suggests, an interest-only mortgage works on the basis that you only pay the interest due on the amount you borrowed each month.

Each month, you’ll pay out less than you would on an equivalent value repayment mortgage, because you are only repaying the interest, not the capital itself.

You will still owe the amount you originally borrowed at the end of the mortgage term, so you will need to have a repayment plan in place to pay back the full cost of the property at the end of the mortgage term

By investing the money that you save on capital repayments each month into ‘repayment vehicle’, such as an ISA, a pension or other investments, you build up a lump sum over the term of the mortgage which you then use to pay off the entire mortgage balance.

There is a potential for risk with an interest only mortgage that isn’t present if you take out a repayment mortgage - if you do not have sufficient funds available to repay the capital in full at the end of the term, you may have to sell your property.

Potential advantages of interest only mortgages

There are several reasons why you might consider an interest only mortgage, some of which include:

Lower repayments - The prospect of lower monthly payments can be an appealing option and could make a mortgage more affordable in the short term. Use a mortgage calculator to work out your monthly payments.

Potential extra cash - If your repayment vehicle does really well over the term of the mortgage, you could find that you can afford to pay off the capital with some extra cash left over.

Flexibility - Interest only mortgages can sometimes offer greater flexibility that repayment mortgages – for example, you may be able to make overpayments one month and just pay interest the next month depending on your cash flow.

Potential disadvantages of interest only mortgages

While the monthly repayments you make on an interest-only mortgage are likely to be lower than with a repayment mortgage, there are some potential disadvantages to be aware of:

Lack of security - This is one of the main potential drawbacks of an interest only mortgage. There is no guarantee that your repayment vehicle will perform well enough to ensure that you can pay off the mortgage in full at the end of the term.

Limited Lenders – Not all UK lenders offer interest only options. Lenders that do will do so on set criteria,  and there are only a small number of lenders that accept selling the property as a valid reason for repayment.

Existing mortgage on property - Typically interest only lenders will require you to have no more than a 75% LTV on your property.

New Mortgage? If yes you will typically need a large deposit – You might save on your monthly repayments with an interest only mortgage, but you may find it hard to access one unless you can provide a substantial initial deposit. Most lenders who provide an interest only option will require you to have at least a 25% deposit.

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