Only pay the interest
With an interest only mortgage your monthly repayments only pay the interest on your loan. You will still have to pay the whole amount you originally borrowed at the end of the mortgage term.
As the monthly payments are for interest only, it is important when comparing the total monthly cost of an interest only mortgage with those of a repayment mortgage, to include the money put aside as savings.
How it works
With an interest only mortgage your monthly repayments only pay the interest on your loan. You will still have to pay the whole amount you originally borrowed at the end of the mortgage term.
As the monthly payments are for interest only, it is important when comparing the total monthly cost of an interest only mortgage with those of a repayment mortgage, to include the money put aside as savings.
How it works
- The original amount you borrowed stays the same
You're not paying back any of the capital you borrowed each month, just the interest for the loan period. So at the end of your mortgage term you will still owe the original amount you borrowed. - The original amount you borrowed will need to be paid in one lump sum
At the end of the mortgage term you will need to make a lump sum payment of the whole amount you originally borrowed.
You will need to make separate arrangements to make sure you can pay the final lump sum. This will normally be some form of investment such as an ISA, endowment, PEP or pension.
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Enquire now online or call 0800 009 3603 (Monday - Friday 9am to 5.30pm) for new mortgage enquiries or further lending.
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YOUR HOME MAY BE AT RISK IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
An arrangement fee of 3% of the advance (minimum of £1,500 to a maximum of £4,000) will be charged, plus a typical completion fee of £1,995.
Any changes to an existing account may be subject to early repayment charges that are part of the terms and conditions of your mortgage.
To view a guide of typical fees associated with one of our mortgage accounts, click here.
An arrangement fee of 3% of the advance (minimum of £1,500 to a maximum of £4,000) will be charged, plus a typical completion fee of £1,995.
Any changes to an existing account may be subject to early repayment charges that are part of the terms and conditions of your mortgage.
To view a guide of typical fees associated with one of our mortgage accounts, click here.
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