What is an interest only mortgage?
Interest only mortgages are those that only oblige you to pay the interest of the mortgage each month, and pay the entire capital of the mortgage at the end of the mortgage term. They have some of the lowest mortgage repayments on the market.
Although the size of the mortgage payments is often small, the interest rates on interest only mortgages are often high. Also, it should be noted that interest only mortgages expose you to a greater risk of negative equity. This is because the mortgage payments do not go towards repaying the capital of the mortgage.
You can access an interest only mortgage through Halifax. You can view all the available interest only mortgage deals through our Halifax. interest only mortgage calculator at the top of the page.
Why do people Choose an interest only mortgage?
The main reason is to keep monthly costs to a minimum.
1. Has your initial mortgage deal come to an end?
By switching to a better deal with a different mortgage provider, an interest only mortgage could potentially allow you to benefit from lower interest rates and lower monthly mortgage repayments.
2. Are you looking to raise money?
By remortgaging you may be able to releasing equity in your home.
People often remortgage to provide money for:
- Home improvements
- New Kitchen
- New En-suite bathroom
- Consolidate other existing debts.
3. Borrowing in retirement interest only up to age 80
Free up funds from your home so you can live the life you want to.
Post Office through their Retirement Link Mortgage » provide an interest only mortgage option which allows you to borrow on an interest only basis up to age 80.
This could be right for you if you are looking for a good alternative to equity release or you are looking to home improvements or raise funds for something special e.g. a child's wedding or first home deposit.
You can borrow up to 30% of the value of your property and your property must be worth at least £250,000 to qualify. Click here for more details »>
If you are not sure whether now is the right time to remortgage or whether you can get an interest only deal, then we can put you in touch with an independent mortgage broker who will compare Santander with the rest of the market providing impartial advice.