With an interest-only mortgage, you only pay the interest on the amount you’ve borrowed each month, but none of the original amount you borrowed. Because of this, the amount you owe doesn’t reduce.

With an interest-only mortgage, your monthly payments are lower than they would be on a repayment mortgage. However you'll need to repay the amount you borrowed (the capital) at the end of the term, so you'll need a suitable repayment plan.

To qualify for an Interest-only mortgage with us, you must:

• Be able to afford an equivalent repayment mortgage
• Have at least £200,000 equity in the property
  (£300,000 equity for the regions of Greater London and the South-East, remaining at completion regardless of your chosen repayment plan.) 
• Borrow no more than 75% of its value.
   

You’ll also need to show us a suitable repayment plan which must be paid in pounds sterling.