An interest only mortgage is where the monthly payments only cover the interest of the loan and not the capital itself.

This means that the monthly payments will be less than they would be on a repayment mortgage but that at the end of the mortgage term you still owe the lender the full original amount of the loan.

Like repayment mortgages fixed and variable mortgage rates are available for interest only mortgages.

An interest only mortgage is usually more expensive overall than a repayment mortgage as you are paying interest on the whole of the amount of the loan throughout the term.

Some advantages of interest only mortgages may be:

• lower monthly payments
• you can invest the money you save on monthly repayments and perhaps pay off your mortgage earlier or make improvements to your property.
• if you are purchasing a buy to let  property and have a regular income from this - you can use the profits to pay back the capital.

For an initial chat you can call Chris at our Brighton Office on 01273 870 302, mobile 07821409589 or email him on chris@themortgage-house.co.uk or if you'd like to arrange a call back – fill in the details on our contact page.

We look forward to speaking to you