If you’re looking to sell a second property in a few years, the proceeds of which will cover the cost of your new purchase, then an interest only mortgage could be used to bridge the gap between the transition.
What are interest only mortgages used for? Therefore, interest only mortgages require lower total monthly payments.īut, you need another method of repaying your loan other than on a monthly basis for example, selling another property or investment. This means at the end of your mortgage term you will still owe the original mortgage amount to your bank, despite paying back the interest. With an interest only mortgage, however, each month you are only required to repay the monthly interest your loan has generated and you don’t need to repay any of the loan itself.
#Interest only mortgage calculator full#
With a standard repayment mortgage, each month you pay back the interest your loan has accrued along with a small portion of your actual loan.Īfter the full mortgage term, which could be 25 or 30 years, you will have repaid your entire loan on top of your interest payments and be debt-free. What is an interest only mortgage?Īn interest only mortgage is a mortgage that you only repay the interest on, as opposed to making capital repayments each month.
Make sure that you read the separate key facts lender illustration before you make a decision. It has only been designed to give a useful general indication of costs. If you are thinking about changing your current deal see the changing deals section for more information.This information is computer-generated. Lines are open 9am to 7pm Monday to Friday and 9am to 2pm Saturday. If you’re changing your term length, repayment mortgages can run until your intended retirement age or the maximum age of 75.įor Buy to Let mortgages, the maximum term is 40 years, and the maximum age is 85.Ĭall us on 08. For example, from a mortgage-related endowment policy or ISA. If you’re changing to an interest only mortgage, we’ll need to see that you have a suitable repayment plan in place to pay off the capital at the end of your term. You’ll need to provide evidence of your income.A credit search will need to be carried out.If you’re looking to reduce or increase your term or you want to change to an interest-only mortgage, there’s a £75 fee.Log on, choose your mortgage account, then click ‘Manage my mortgage’.Ĭhanging your term or the way you repay your mortgageīefore you get in touch with us, please be aware of the following. If you already have Online Banking, you can start the process to change your mortgage term or the way you repay your mortgage (for example, switching from interest only to repayment) before continuing your application over the phone. Investment fees, charges and key documents.Savings and investments View all savings and investments.
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