There are two ways to repay your mortgage:

  • Repayment
  • Interest-only

With a repayment mortgage, you pay back a small part of the loan and the interest each month.  Assuming you make all your payments, you’re guaranteed to pay off the whole loan at the end of the term.

With an interest-only mortgage, you only pay the interest on the loan. At the end of the term you’ll still owe the original amount you borrowed.  This means your payments will be less than on a repayment mortgage, but at the end of the term you’ll still owe the original amount you borrowed from the lender.

Repayment plans

Before lending money on an interest-only basis, mortgage lenders will want to see that you have an approved repayment plan in place. This is how you can show them that you’ll be able to pay back the amount you borrowed at the end. Acceptable repayment plans vary from lender to lender but may include savings and investments, sale of an asset, such as another property, or downsizing, assuming there is sufficient equity in the property currently.

The lender is likely to want to check from time to time that your chosen repayment plan is on track to pay the required amount, however you should also regularly review your repayment strategy to ensure that it’s on target to repay the loan.

Buy to let mortgages

Interest-only mortgages are a popular choice for buy-to-let landlords. This is because they allow landlords to maximise how much money they’ll receive each month, thanks to the lower mortgage repayments, and allows them to reduce the mortgage capital whenever it best suits them. The lower repayments mean landlords can devote the saved money towards other areas of their portfolio, where applicable.

How a specialist broker can help you find the right interest-only mortgage

Many of the lenders who do still offer interest-only mortgages don’t lend directly to borrowers. To get your hands on these deals, you will need to apply via a specialist mortgage broker like Watts Mortgages.

Because we have significant experience in this area of the market, and well-established relationships with lenders, we can identify which lenders will be happiest considering your case and which deals best match your needs and circumstances.

What to do if you have an interest-only mortgage

If you have an interest-only mortgage it’s important to know you will be able to repay the capital at the end of the term.

If you’re worried about repaying the amount owed on an interest-only mortgage you should take action now, even if you’re several years away from the mortgage end date. The longer you leave it, the fewer options you’ll have so it’s important to contact us as soon as possible where our experienced and knowledgeable Advisers will be happy to assist you.

To speak to one of our independent mortgage advisors now call 01270 620555 or email us at

Your property may be repossessed if you do not keep up repayments on a mortgage


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Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

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The FCA does not regulate some forms of mortgages. The FCA does not regulate taxation advice, trust advice and some forms of buy to let mortgages.