Is an Interest Only mortgage right for me?

Not all lenders offer interest-only mortgages, but they are available for most types of borrowers, from first-time buyers and home movers to buy-to-let borrowers and people looking to remortgage. This type of mortgage isn’t right for everyone – and it is essential to ensure that you have a suitable repayment vehicle in place to pay off the loan at the end of the mortgage term – but in some circumstances interest-only mortgages can be advantageous.

For some homebuyers, the lower monthly payments on an interest-only mortgage can help with budgeting. This can also apply to borrowers who may have irregular monthly income, such as contractors, freelancers or people who are self-employed. Some buy-to-let property buyers prefer interest-only mortgages because the lower monthly payment allows them to maximise their rental yield, and they either repay the mortgage when the property is sold, or make periodic lump-sum part repayments to pay down the debt.