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

Upon application a fee of up to £495 will be payable (typically £195)

At present there are sometimes complications for applicants seeking interest only mortgages. These issues have arisen due to high prices for property, pay freezes and the lender’s attitude towards this kind of mortgage.

However, stepping onto this ladder is made less easy by the lenders, as they implement and maintain strict guidelines when dealing with interest only mortgages. Some of the mortgage lenders criteria may include:

  • Interest only mortgages unavailable if the property is for residential purposes
  • Interest only mortgages for a limited loan to value, for example up to 65%
  • Only available if a sufficient repayment scheme is present, for example endowment or pension plan

Please note: Buy to let mortgages remain unaffected by the changes lenders have made with regards to interest only mortgages. The aforementioned changes are in association with the residential market only.

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Interest Only Mortgages

With an interest only mortgage, the interest rate of the mortgage is repaid, but not the mortgage loan itself. Although this may appear as being a means of spending “dead money”, just as with renting, however the difference is that the rate attached to the interest only mortgage can be far more appealing than the cost of renting. Furthermore, you are able to secure a place to live as well as having the opportunity to pay off quantities of the loan’s capital, should your finances permit it.

If the worth of your property should increase during the term of your interest only mortgage, you could potentially be left with a profit when you sell the property. For landlords, the flexibility of an interest only mortgage is perfect because it allows them to rent multiple properties without investing too much with regards to capital repayments. As an added benefit, if the landlord can achieve rent from their tenants at a price greater than the mortgage rate, the investment will be paid for very easily.

However there are potential risks, such as the value of the property decreasing rather than increasing, making it difficult for the applicant to pay back the mortgage loan. With mortgage lender’s criteria tending to vary so much, it is easiest to check directly with Talk Mortgage Broker, who can inform you on the best deals for you.

Interest only mortgages peterborough

Interest Only Mortgages with Talk Mortgage Broker

Why switch with us? We will…

  • Provide completely objective advice
  • Use our extensive knowledge of the market to your best interests
  • Act on what you want, not just presume

Please note, the Financial Conduct Authority does not regulate buy to let loans.