Interest Only Mortgage Calculator

  • Interest Only Specialists
  • Free, no obligation initial consultation
  • Exclusive Rates
  • Hundreds of 5 Star Reviews

Interest Only Mortgage Calculator

  • Interest Only Specialists
  • Free, no obligation initial consultation
  • Exclusive Rates
  • Hundreds of 5 Star Reviews
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Author: Carl Shave - CEO and co-founder
Last updated: 21 Jun 2024

How our interest-only mortgage calculator works

Use our interest-only mortgage repayment calculator to work out how much you might be able to borrow. The calculator works based on your income and other factors. Please note that the figure provided by the calculator is for illustration purposes only.

The exact amount you will be able to borrow can vary from lender to lender. It will be based on your individual circumstances, income sources and credit history. To discuss your mortgage needs in more detail, give us a call today.

Is an Interest Only mortgage right for me?

Not all lenders offer interest-only mortgages, but they are available for most types of borrowers. These include 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. It’s essential that you have a suitable repayment vehicle in place to pay off the mortgage at the end of the term.

In some circumstances interest-only mortgages can be advantageous. For some homebuyers, the lower monthly mortgage 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
  • self-employed

Some buy-to-let investors prefer interest-only mortgages because the lower monthly payment allows them to maximise their rental yield. They either repay the mortgage when the property is sold or make periodic lump-sum part repayments to pay down the debt.

How much can I borrow?

This will very much depend on your individual circumstances and will vary from one applicant to another. The lender will make an assessment based on your permitted income and expenditure. Other factors such as the number of dependents you may have will also be considered.

Arranging your mortgage on interest-only will not necessarily mean you will be able to borrow more. However, in certain circumstances this may be possible. To see what you may be able to borrow use our affordability calculator. Alternatively speak to one of our experienced advisors.

What is the difference between interest-only mortgages and tracker mortgages?

These are two very distinct different things in relation to a mortgage. Interest-only refers to the method in which you will pay back the loan. This involves simply paying the interest each month.

The tracker element relates to the type of interest rate you are being charged. It usually refers to the rate being linked to base rate. Both of these are universally independent of the other.

Making overpayments

When arranging your mortgage on an interest-only basis it is your responsibility to ensure you can repay the mortgage balance at or before the end of the term. As your balance is not reducing with each payment it is worth noting that the interest is always charged on the static balance. As such an interest-only mortgage will cost more in total interest than a comparable repayment mortgage.

With this in mind, it is always worth considering making any capital overpayments when possible. This can assist in reducing the overall interest charged.

Do however ensure you check the terms and conditions of your mortgage as penalties could be incurred.