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Interest Only vs Repayment
Compare interest-only and repayment mortgages side by side. See how monthly payments, total interest, and overall cost differ.
Not sure which option is right for you?
Our advisers will help you choose the best mortgage type for your situation.
Interest only vs repayment: which is right for you?
Repayment mortgages gradually pay off both the interest and the capital, so at the end of the term you own your home outright. Monthly payments are higher, but you're guaranteed to be mortgage-free. Use our repayment calculator to see a full amortisation schedule.
Interest-only mortgages only cover the interest each month, so payments are lower. However, you still owe the full loan amount at the end of the term and must have a strategy to repay it (investments, savings, property sale, etc.). Buy-to-let investors often favour interest-only as it maximises rental yield.
Most residential lenders now require a credible repayment strategy for interest-only mortgages. Read our mortgage guide for a full breakdown, or speak to our advisers to discuss which option suits your circumstances.
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Not sure which mortgage type is right for you?
Our advisers will help you choose between interest-only and repayment based on your circumstances. Free, no-obligation advice.