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Summary
Interest-Only Mortgages: UK’s Best Rates & Independent Advice
Interest-only lets you pay the interest each month while the balance stays the same. You need a clear plan to repay the capital later. Options include part-and-part (split between interest-only and repayment). We compare leading lenders to help you find some of the best interest only mortgage rates for your profile. Plain English, independent guidance. CeMAP-qualified, FCA-regulated advisers. Rated 5★ with 2,500+ Trustpilot reviews and 5/5 on Google.
What you’ll get (quick overview)
Rate comparison: interest-only vs part-and-part, with total cost shown.
Repayment route check: sale of property, investments, bonuses or pension lump sum (varies by lender).
LTV and affordability explained (LTV = mortgage as a % of the property price).
Residential and Buy-to-Let options outlined, including stress tests for landlords.
Risk clarity: higher total interest and end-of-term repayment responsibilities, explained in plain English.
Soft eligibility review first; full checks happen later if you apply.
How it works
We confirm your goals, timeline and exit plan. Lenders assess income, credit conduct and loan-to-value. Residential interest-only requires a credible repayment strategy; Buy-to-Let focuses on rental cover. Part-and-part can reduce the final balance you’ll need to repay. Exact rules and pricing vary by lender.
Key criteria (high level)
Robust repayment plan, stable income, sensible credit history and suitable LTV. Property type, term length and age at end of term also matter. Thresholds vary by lender.
Typical documents
Photo ID and address history, recent payslips or SA302s/Tax Year Overviews, bank statements, evidence of the repayment plan (e.g., investment statements or downsizing plan), and any existing mortgage statements.
Timings
Eligibility review can be quick. Full application to offer typically takes a few weeks. This varies by lender and case complexity.
When to speak to an adviser
- You want interest-only flexibility or a part-and-part structure.
- Income includes bonuses, dividends or rental profits.
- You plan to sell or downsize later and need lender-acceptable evidence.
- You’re a landlord navigating portfolio rules and stress tests.
- You were declined elsewhere or offered less than expected.
Trust & transparency
CeMAP-qualified advisers. FCA-regulated. UK-wide support. Rated 5★ with 2,500+ Trustpilot reviews and 5/5 on Google.
Your home may be repossessed if you do not keep up repayments on your mortgage.
Interest Only Mortgages UK’s Lowest Rates
Interest only mortgages make up just shy of 10% of the total Mortgages in the UK. They are commonly used by landlords as a strategic tool to leverage cash flow and maximise returns from tenants. However, it is not just right for landlords. There are many circumstances where an interest only mortgage may be desired, and there are various customer profiles that make up the total number across the UK that opt for this solutions.
There are many reasons why people would get an interest only mortgage, and throughout this page we will asses the pro’s and con’s of each. You should definitely get expert advice, and ensure you conduct a search across the market and make an educated decision of all your options. Not just one’s that one lender has offered.
At The Mortgage Broker, we specialise in offering clear, professional advice and access to over 25,000 mortgage products from more than 130 lenders, ensuring you get tailored recommendations – not just generic rates. Our 5-star rated team on Trustpilot and Google is here to help you make confident, well-informed decisions about your mortgage journey and help decide whether or not an interest only mortgage is right.
What Is the Difference Between Interest Only and Repayment Mortgages?
The key difference lies in how the mortgage is pay back at the end of the term:
| Mortgage Type | Monthly Payments | Capital Repaid | End of Term |
| Interest Only | Lower (interest only) | No | Full loan remains |
| Repayment | Higher (interest + capital) | Yes | Mortgage fully paid |
Interest only mortgages can offer more flexibility and affordability short-term, but higher long-term risk. Repayment mortgages ensure that the debt is fully paid off over time, offering greater financial certainty.
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Buy to Let Landlords use Interest Only Mortgages to Maximise Rental Yield!
Search and Compare Interest Only Mortgage Rates with Standard Repayment Mortgages.
We can quickly search and compare interest only mortgage rates through our platform or you speak directly to one of our expert mortgage brokers. Unlike comparison sites that show a limited selection, or going direct to your lender who can only offer a handful of products, The Mortgage Broker provide access to over 25,000 mortgage products – and we help you filter by lender criteria, term, LTV, and repayment strategy. Best of all, you’ll get rates and guidance tailored to your needs, not just a list of numbers.
If you’re exploring your mortgage options, you may have come across the term, interest only mortgage. This type of mortgage can be an attractive choice for many type of borrowers, but it is essential that you understand how it works, what the risks are and whether it suits your financial goals, not to start paying off your mortgage.
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FAQ’s: The Mortgage Broker.
At The Mortgage Broker, we specialise in offering clear, professional advice, with access to over 25,000 mortgage products from more than 130 lenders. We will tailor our recommendations, as well as get you instant access to the best interest only mortgage rates. Our 5-star rated team is here to help you make confident and well informed decisions about your mortgage.
- Get an Free Instant Mortgage in Principle, but with Advice!
- Access to over 130 Mortgage Lenders & 25,000 Rates
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Yes. At The Mortgage Broker, we work with over 130 lenders to help clients find the most suitable interest only mortgage products. Whether you’re purchasing a new home, remortgaging, or investing in property, we offer expert advice, full-market access, and personalised solutions based on your financial situation and goals.
At The Mortgage Broker, we help landlords frequently:
- Compare buy-to-let interest only mortgages from across 130+ lenders
- Choose the right strategy based on cash flow goals and exit plans
- Help understand the tax and long-term implications of interest only borrowing – please note we are not tax advisers
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Search and Compare Interest Only Mortgage Rates with Standard Repayment Mortgages.
We can quickly search and compare interest only mortgage rates through our platform or you speak directly to one of our expert mortgage brokers. Unlike comparison sites that show a limited selection, or going direct to your lender who can only offer a handful of products, The Mortgage Broker provide access to over 25,000 mortgage products –and we help you filter by lender criteria, term, LTV, and repayment strategy. Best of all, you’ll get rates and guidance tailored to your needs, not just a list of numbers.
Request a call backFAQ’s: Interest Only Mortgages.
Yes, they are popular with landlords as they allow lower monthly payments, which can help maximise rental yield and manage cash flow.
With interest-only mortgages, you only pay the interest during the term, leaving the full loan amount outstanding at the end. Repayment mortgages include both interest and capital, gradually reducing the loan balance over time.
An interest-only mortgage requires you to pay only the interest on the loan for a specified period, typically 5 to 10 years. After this, you’ll need to pay off the full loan balance or refinance.
Common strategies include selling the property, using savings or investments, or refinancing. It’s important to have a clear plan from the start.
Eligibility often requires a high income, substantial savings, or a large deposit. Lenders will need proof of a repayment plan for the loan’s end, such as selling the property or using savings.
Yes, products like Retirement Interest Only (RIO) mortgages cater to older borrowers, allowing them to pay only interest until a life event like a move to a care home.
Yes, but this depends on the lender’s policies and your financial situation. Switching can lead to higher monthly payments as you’ll begin paying off the principal.
Interest rates are not inherently higher, but over time, interest-only loans can be more expensive due to paying interest only without reducing the principal.
You may need to sell your home or refinance. Some lenders offer options like extending the term or switching to a repayment mortgage.
The main risk is the need to pay the loan’s full amount at the end of the term. Without a repayment plan, you could face financial strain or risk losing your property.
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FAQ’s: Buy to Let Interest Only Mortgages.
An interest only mortgage for a buy-to-let landlord is one of the most common and strategic borrowing methods used by property investors and even first time buyer landlords. It enables you to keep monthly payments lower while focusing on rental yield and long-term capital growth. Below is a detailed overview tailored to landlords looking to understand how these mortgages work, the benefits, and what lenders expect.
With a buy-to-let (BTL) interest only mortgage, you only pay the interest on the mortgage each month. The full mortgage amount is repaid at the end of the full mortgage term, typically by selling or refinancing the property.
Example:
If you were to borrow £250,000 at 5% interest:
- Monthly payment: £1,042 (interest only)
- Capital repayment: £0 monthly
- Total to repay at end of term: £250,000 (capital)
This structure helps you maximise monthly rental profit, especially where the rental income exceeds the interest-only mortgage payment.
Can You Get Interest Only Buy to Let Mortgages?
Yes, interest only buy to let mortgages are common among Property Investors and portfolio Portfolio Landlords. They help maximise monthly rental yield by keeping repayments lower. You repay only the interest during the term, and typically settle the loan by selling the property or refinancing.
At The Mortgage Broker, we have helped hundreds of landlords and portfolio investors find competitive buy to let interest only products, even in more complex scenarios like HMO’s or Limited Company structures.
Yes, but you need to demonstrate that your retirement income can cover interest payments and provide a credible plan for repaying the capital at the end of the term.
Lenders will check your planned method to repay the loan, such as using savings or selling the property, for feasibility and sufficiency. Regular updates may also be required.
They allow landlords to lower monthly payments and effectively manage cash flow, using the savings to address property costs or grow their property portfolio.
Lenders usually require a minimum deposit of 25% or more. This varies based on the lender’s criteria and your financial circumstances.
While calculators provide an estimate of payments, it’s crucial to consider factors like lender requirements, interest rate changes, and your repayment plan for thorough financial planning.
How Interest Only Mortgages Help Landlords Leverage Cash
Lower Monthly Payments
Because you’re only paying the interest each month (not the capital), your outgoings are lower compared to a repayment mortgage. This means more of the rental income becomes available cash.
Increased Cash Flow
The extra cash flow can be used to:
- Build a financial buffer
- Cover repairs or void periods
- Reinvest into additional properties (i.e. growing your portfolio)
- Repay other higher-cost debt
Tax Efficiency
It is extremely important to get proper tax advice from an accountant, as there can be tax efficiencies, of course especially through Limited Companies.
Capital Growth Strategy
If a landlord expects property prices to rise, they may prefer not to repay the capital and instead benefit from capital appreciation, selling the property later at a profit.
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FAQ’s: Interest Only Mortgages. Over 55’s.
If you are over the age of 55, you will find yourself classed into the bracket of a later life borrower. There are several interest only mortgage options available for over 55’s, many of which have been specifically designed to support older homeowners who want to stay in their homes, access equity, or manage cash flow during retirement.
Here’s a clear breakdown of the main interest only mortgage options for people aged 55 and over:
Retirement Interest Only Mortgages (RIOs):
RIO mortgages are a newer type of interest only product designed for borrowers typically aged 55+, where you can just make interest payments every month. These mortgages are only repaid upon a life event, such as passing away or moving into a care home/family home. Therefore, you are paying interest for life, and there is no set fixed term on this mortgage. You do keep ownership of your own home.
- Retirees with steady pension or investment income
- Those wanting to avoid equity release or keep costs lower
- Customers who want to leave an inheritance by protecting their capital
Case Example:
You borrow £100,000 on a RIO mortgage and pay £300/month in interest. You never repay the capital during your lifetime and when you pass away or go into care, your home is sold to repay the balance.
Standard Interest Only Mortgages in Later Life
Some mortgage lenders offer traditional interest only mortgages up to the of age 70–85; however, the criteria is generally more strict. You must have a clear repayment strategy (e.g. sale of the property or investments) and you must prove affordability, including pension or investment income. Some lenders do offer interest only terms and offer longer terms that extend beyond retirement age (e.g. up to 85 or age 90)
- Borrowers in their 50s and 60s with strong financial profiles
- Downsizers planning to sell and move in future
- Customers wanting lower monthly outgoings
Equity Release (Lifetime Mortgages)
While technically not an interest only mortgage, some equity release products do allow for voluntary interest payments that are made throughout the term. In fact, these can be encouraged to reduce interest rolling up. These therefore effectively work like a flexible interest only deal where you can borrow against the equity in your home. There are no monthly payments that are required (optional as just mentioned) and interest rolls up to be repaid upon a life event.
- Customers needing maximum flexibility
- Those who don’t want monthly commitments
- Customers whom do not qualify for a RIO or a standard interest only mortgage.
Which Option is Right for ME?
Each option suits different financial goals and lifestyles:
| Option | Monthly Payments | Repayment Trigger | Age Suitability | Ownership |
| RIO Mortgage | Yes (interest only) | Death or care | 55+ | You own home |
| Standard Interest Only | Yes (interest only) | Fixed term | 50–80+ | You own home |
| Equity Release | Optional | Death or care | 55+ | You own home (secured loan) |
Can I Get a Retirement Interest Only Mortgage?
Yes, Retirement Interest Only Mortgages (RIOs) are designed specifically for older borrowers – typically aged 55 and over. These mortgages allow you to:
- Pay only the interest each month
- Repay the capital only when you pass away or move into long-term care
They are a flexible solution for retirees who want to stay in their home and manage cash flow without selling their assets or of course, their home. We can help you assess whether a RIO is right for your retirement planning.
How Do Retirement Interest Only Mortgages differ from Equity Release?
| Mortgage Feature | Retirement Interest Only Mortgage | Equity Release |
| Monthly Payments | Yes (interest only) | None (optional) |
| Ownership | You retain full ownership | Usually a loan against equity |
| Repayment | On death or long-term care | On death/sale of home |
| Affordability Check | Required | Not always required |
| Interest Costs | Lower over time | Compound interest grows |
A Retirement Interest Only Mortgage may be more cost-effective if you can afford interest payments and want to maintain more control over your estate planning.
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