- To 80% Loan to Value
- Part and Part To 85% Loan to Value
- Sale and Downsizing
- Pensions & Bonuses Considered
- No Credit Scoring Application for Some Lenders
- No maximum age for residential & buy to let mortgages
- Common Sense Underwriting
Interest Only Mortgages
Some of our clients wish to pay their mortgage on an interest only basis, whereby they pay the interest every month on the mortgage they owe, however they do not pay anything off the balance of the mortgage itself.
This is different to a repayment mortgage (often called a “capital and interest” mortgage), where both the interest is paid each month plus a small amount is also paid off the mortgage balance, with the aim of reducing the balance to £0 once the mortgage ends, as long as you make all of your payments on time and in full.
The benefit of an interest only mortgage is that they typically offer lower monthly payments than a repayment mortgage as you are only paying the interest.
Additionally, if you wish to take a mortgage out over a shorter period than the standard 25 years (called the mortgage term), such as 5 years, then the payments on a repayment mortgage could be very large as the entire mortgage balance would have to be paid back over the 5 year period. With an interest only mortgage, the mortgage term does not affect the monthly payments as you are paying only the interest and nothing off the mortgage balance itself.
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