Compare our best interest only mortgages

With an interest only mortgage, you only pay back the interest (not the loan) until the very end of the mortgage term. The monthly repayments are smaller than traditional repayment mortgages, but not everyone can get one. Find the best interest only mortgage with our comparison tool. Explore our interest only mortgage guide to find out more.

Mortgage type

Property price

£

Mortgage amount

£

85% LTV

Mortgage term

years

Initial rate type

Deal length

Repayment type

Our best interest only mortgages

  • Barclays 2 Year Fixed mortgage

    Initial rate 1.87%. APRC 3.9%. Set-up fees £999
  • Monmouthshire Building Society 2 Year Variable mortgage

    Initial rate 2.04%. APRC 4.9%. Set-up fees £999
  • Monmouthshire Building Society 2 Year Variable mortgage

    Initial rate 2.04%. APRC 4.9%. Set-up fees £1,149
  • Barclays 3 Year Fixed mortgage

    Initial rate 2.09%. APRC 3.8%. Set-up fees £999
  • Barclays 2 Year Fixed mortgage

    Initial rate 2.09%. APRC 3.9%. Set-up fees £299
  • We've found 70 mortgage deals

    Barclays

    2 Year Fixed

    Initial rate

    1.87%

    until 31-07-2021

    APRC

    3.9%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £280.50

    for 24 months

    Barclays

    2 Year Fixed

    Initial rate

    1.87%

    until 31-07-2021

    APRC

    3.9%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £280.50

    for 24 months

    Barclays

    2 Year Fixed

    Initial rate

    1.87%

    until 31-07-2021

    APRC

    3.9%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £280.50

    for 24 months

    Monmouthshire Building Society

    2 Year Variable

    Initial rate

    2.04%

    APRC

    4.9%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £306.00

    for 24 months

    Monmouthshire Building Society

    2 Year Variable

    Initial rate

    2.04%

    APRC

    4.9%

    overall cost for comparison

    Set-up fees

    £1,149

    Monthly payment

    £306.00

    for 24 months

    Barclays

    3 Year Fixed

    Initial rate

    2.09%

    until 31-07-2022

    APRC

    3.8%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £313.50

    for 36 months

    Barclays

    3 Year Fixed

    Initial rate

    2.09%

    until 31-07-2022

    APRC

    3.8%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £313.50

    for 36 months

    Barclays

    3 Year Fixed

    Initial rate

    2.09%

    until 31-07-2022

    APRC

    3.8%

    overall cost for comparison

    Set-up fees

    £999

    Monthly payment

    £313.50

    for 36 months

    Barclays

    2 Year Fixed

    Initial rate

    2.09%

    until 31-07-2021

    APRC

    3.9%

    overall cost for comparison

    Set-up fees

    £299

    Monthly payment

    £313.50

    for 24 months

    Barclays

    2 Year Fixed

    Initial rate

    2.09%

    until 31-07-2021

    APRC

    3.9%

    overall cost for comparison

    Set-up fees

    £299

    Monthly payment

    £313.50

    for 24 months

    Not ready to get a mortgage?

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    Representative example:

    If you borrowed £190,000 payable over 25 years, with an initial fixed-rate for three years at 5.89%, your monthly payments would be £932.58 for 36 months. This would then revert to a standard variable rate (SVR) of 5.19% for the remaining 22 years, costing £821.75 per month for 264 months. Overall cost for comparison is 5.5% APRC representative. The total amount payable over the full term would be £440,515, including interest of £250,515 and a lump sum of £190,000.

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

    What are interest only mortgages?

    With an interest only mortgage you only pay back the interest on the money you borrowed. This means your monthly repayments are much smaller - but the total amount of interest paid will be much higher over the full mortgage term.

    At the end of an interest only mortgage, you must repay the total amount that you borrowed in the first place - the loan principal. Mortgage lenders will only give you an interest only mortgage if you can prove that you are able to do this.

    Compare our best interest only mortgages

    With a normal mortgage, each monthly repayment goes towards the interest and some of the principal – so by the end of the term you’ve paid off everything.

    For example, if you take out an interest only £200,000 mortgage over 25 years with an interest rate of 2.5%, your monthly repayments would be just £417. A normal repayment mortgage, over the same 25 years and 2.5% interest rate, would have monthly repayments of £897.

    Calculate your monthly mortgage repayments

    How to pay off an interest only mortgage

    The key to interest only mortgages is that you must have another way of paying off the principal – and the bank or building society will want to know your repayment method before offering you an interest only mortgage.

    The simplest route is to sell the property at the end of the mortgage term and use that to pay back the lender. Many buy-to-let mortgages, where you buy a property specifically to rent it out rather than move into it, are settled in this way.

    Other options are a repayment vehicle – a savings plan, a pension withdrawal, or another investment fund – or some kind of lump sum, usually via inheritance.

    Read more about buy-to-let mortgages

    Which mortgage type is cheaper?

    An interest only mortgage is usually cheaper over the short term due to its lower monthly payments, but more expensive in the long run because you’re not reducing the principal.

    For example, using the previous £200,000 interest only mortgage scenario, the total amount repaid would be £325,000.

    A repayment mortgage is usually more expensive in the short term as you have larger monthly repayments, but you pay the lender less money in total because each month you are reducing the principal – and thus each month you pay less and less interest.

    Using the previous £200,000 mortgage scenario, the total amount repaid would be £269,000.

    Learn more about the different types of mortgage

    Interest only mortgage FAQs

    Can I get a part-and-part mortgage?

    Yes, you can get a mortgage that is part repayment and part interest only. You will pay off some of the loan principal each month, but there will still be an amount that must be settled at the end of the mortgage.

    Can I remortgage to an interest only mortgage?

    Yes.

    Can I switch between repayment and interest only mortgages?

    Yes, though there could be fees and other charges. Speak to your mortgage lender to find out more.

    Mortgage calculator: How much can I borrow?

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    Last updated: 25 June, 2019

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