Interest Only Mortgages
Interest only mortgages for residential and investment property - keeping monthly payments lower while capital is retained in other assets - with specialist lenders that accept a wider range of repayment vehicles than the high street.
How interest only mortgages work
An interest only mortgage requires you to pay only the interest each month. The capital borrowed is repaid at the end of the term from an evidenced repayment vehicle - sale of the property, investment portfolio, pension lump sum, or another asset. Monthly payments are significantly lower than on an equivalent repayment mortgage. FCA regulation requires a credible and evidenced repayment strategy - specialist lenders accept a wider range of vehicles than mainstream banks.
Every interest only requirement placed
Residential Interest Only
Available from specialist lenders who accept a wider range of repayment vehicles - sale of another property, investment portfolio, pension lump sum, or endowment. Minimum property value and equity thresholds apply.
Buy-to-Let Interest Only
Most BTL mortgages are interest only as standard. Rental income covers the monthly interest and the property is sold or refinanced at term end. ICR assessed at a stress rate regardless of the actual product rate.
Retirement Interest Only (RIO)
RIO mortgages are designed for borrowers over 55. Interest payments continue from retirement income with no fixed term end - capital is repaid from the property sale on death, move to care, or voluntary sale.
Private Bank Interest Only
Private banks offer genuine interest only over 15 to 25 years on large loan residential mortgages, with flexible repayment vehicles including investment portfolios, business equity, and other assets.
Part and Part Mortgages
Part repayment, part interest only - splitting the loan so part reduces over the term while the interest only element requires a separate repayment vehicle. Reduces monthly payments while reducing the capital outstanding at term end.
Interest Only to Repayment Switch
Some lenders allow switching from interest only to repayment mid-term when income allows. We identify lenders with the most accommodating switching provisions where this is a priority.
How it works
Identify the repayment vehicle
We assess your intended repayment strategy - sale of property, investment portfolio, pension, or other asset - and match to the lenders most comfortable with your specific vehicle.
Lender matching on criteria
Interest only criteria vary significantly between lenders. We compare minimum property values, minimum equity requirements, and accepted repayment vehicle types to find the best match for your situation.
Application and evidence
Repayment vehicle evidence is assembled in the format each lender requires - portfolio valuations, pension statements, property details. We ensure this is presented correctly to avoid questions mid-application.
Mortgage offer
Typical timeline: 4 to 6 weeks from full application to mortgage offer. Applications with well-evidenced repayment vehicles are assessed faster by specialist lenders.
Looking for an interest only mortgage?
Tell us the loan amount, property value, and your intended repayment vehicle. We identify the lenders most likely to accept your specific situation - same working day response.
Frequently asked questions
What repayment vehicles do lenders accept for residential interest only?
Sale of another property, investment portfolio above a minimum threshold, pension lump sum, endowment policy, and in some cases business equity. The specific vehicles accepted vary by lender - specialist lenders accept a wider range than mainstream banks.
What happens at the end of an interest only mortgage term?
The full capital borrowed is due in a single payment. If the repayment vehicle is not in place or falls short, the lender may require repayment from the property sale. Planning the exit strategy at the point of taking the mortgage - not at the term end - is essential.
What is the minimum property value for residential interest only?
Most specialist lenders require a minimum property value of £300,000 to £500,000 for residential interest only, with minimum equity thresholds of 25-35%. Private bank interest only on high-value residential has no standard minimum but is targeted at loan sizes above £1m.
What is the difference between interest only and a RIO mortgage?
A standard interest only mortgage has a fixed term end date requiring capital repayment. A retirement interest only (RIO) mortgage has no fixed term - payments continue until the property is sold on death, move to care, or voluntary sale. RIO products are specifically designed for borrowers over 55.
Is buy-to-let usually interest only?
Yes - the majority of BTL mortgages are structured interest only. Rental income covers the monthly interest and the property is sold or remortgaged at term end. ICR stress tests ensure the rent covers the interest at an assessed stress rate, regardless of the actual product rate.