What is an interest only mortgage?
An interest only mortgage is where you only pay the interest owed on your mortgage every month. You’ll then need to pay back the amount you initially borrowed at the end of the mortgage term. It’s up to you to make sure you can repay the capital at the end of the mortgage term.
What is the difference between a repayment mortgage and an interest only mortgage?
With a repayment mortgage, you pay towards the outstanding capital balance every month, as well as the interest owed. This means that you’re guaranteed to pay off your mortgage in full at the end of the term, as long as all of the monthly payments have been made in full and on time.
An interest only mortgage is where you only pay the interest owed on your mortgage every month, and then pay back the amount you initially borrowed at the end of the mortgage term.
- How do I find out if my mortgage is interest only?
What should I do to ensure the capital balance will be repaid at the end of the term?
It’s important to keep an eye on your repayment strategy to make sure it’s performing as expected. We'll write to you at regular intervals to remind you that the capital needs to be repaid at the end of the term, but it’s up to you to ensure there’s an adequate strategy in place.
If you’re worried that your repayment strategy is not enough to repay the capital, call us as soon as possible on 0800 169 9712* so we can look at your options.
- The interest only mortgage on my property is due to end soon and I’m not sure I can repay the amount outstanding. What should I do?
- My repayment strategy has changed, is there anything I need to do?
- Can I change my mortgage from interest only to repayment?
I have an interest only mortgage, but no repayment strategy, what should I do?
Call us right away on 0800 169 9712* to discuss what options are available to you. These may be things like making additional overpayments, or switching some or all of the mortgage to repayment.
Please remember that we’re unable to provide any advice about your repayment strategy, so you may wish to also seek independent financial advice.
When it comes to mortgages, there can be lots to think about. That’s why we’ve pulled together a list of our most frequently asked questions, to help you stay on top of things.