Interest only mortgages

Interest-only mortgages

See if this mortgage could be right for you

Pay the mortgage interest each month without reducing the balance. You’ll need to have a plan to repay the balance by the time the mortgage term ends.

Your home may be repossessed if you do not keep up repayments on your mortgage.

Are you eligible?

You’ll need to meet the following conditions before you can apply for an interest-only loan.

  • You’ll need to earn at least £75,000 a year if applying alone
  • In joint applications, one of you must earn at least £75,000 a year, or your combined income must be at least £100,000
  • The deposit you need to provide will be set out in the mortgage you apply for
  • You’ll need to show us how you intend to repay the balance by the time the mortgage term ends

You must be 18 years old or over to apply for a mortgage. Any mortgage you apply for is subject to status and availability.

Features and benefits

Your monthly payments will be lower

That’s because you’re not paying back any of the amount you borrowed – you’re just paying the interest, which is charged on the full balance every month.

Repay the loan by the end of the mortgage term

You need to have a realistic plan in place to repay the loan amount by the time the mortgage term ends. We’ll discuss this plan with you.

How it works

If you meet the eligibility requirements, you may be able to apply for any of our residential, offset or buy-to-let mortgages on an interest-only basis.

Repaying the balance

  • It’s important to regularly review your repayment plan to make sure it’s on track to cover your mortgage balance
  • You may have to pay an early repayment charge if you overpay on your mortgage or pay off the balance before the agreed date1

Getting financial advice

  • You should get independent financial advice on your repayment plan. Search the Financial Services Register to find mortgage brokers that are authorised by the Financial Conduct Authority
  • The Money Advice Service provides examples of repayment methods – but we’ll need to agree your plan before we’ll approve your mortgage application

How to apply

You’ll need to call us or visit a branch to confirm you’re eligible to apply for an interest-only mortgage.

Call us

Call us2 today on 0800 197 1081. Lines are open all day, every day, except on bank holidays and during Christmas, when they may be closed at off-peak times.

Visit a branch

Find a branch near you that offers appointments with mortgage advisers and see when we’re open.