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What is an interest only mortgage?
A quick summary
An interest only mortgage is a loan for a property where your monthly repayment covers just the interest on the amount you borrowed.
It doesn’t repay the amount you borrowed. This will need to be paid in full when the mortgage term ends. Find out more about how they work.
Existing Lloyds mortgage customers
Read our frequently asked questions.
How it works
Applying for an interest only mortgage
An interest only mortgage is more commonly used to buy a buy to let property but you can also use them to buy residential properties.
Before you apply, it’s worth knowing that lenders usually have strict criteria you would need to meet when applying for an interest only mortgage.
For example:
- a low loan to value (LTV) ratio on the property
- a high annual income
- a large deposit.
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