Switch to Interest-only

If your product rate changes whilst under the Mortgage Charter support scheme your interest-only payments will change. Please contact us before completing your Mortgage Charter application to discuss this further. We can help you decide when the best time would be to seek support.

If you’re struggling to pay your mortgage or worried you might struggle in the future, we’ll work hard to support you.

Switching to an interest-only mortgage means you'll only pay the interest on your mortgage, rather than repaying the capital and interest.

This is available for customers who are up to date with their payments and can be taken for up to 6 months. Following which, the mortgage will revert to your previous repayment method.

Please be aware that by requesting this change it will increase the cost of your mortgage in the long-run.

Affordability

As part of the Mortgage Charter the need to complete affordability checks has been removed. You will need to consider when the mortgage reverts back to capital and interest that you are able to afford the increased payments for your remaining mortgage term. This is due to the capital payments you have missed for the 6 month period being repaid over your remaining mortgage term.

What happens after 6 months?

After your 6 month interest-only period has ended you will revert back to the original repayment structure you held before temporarily switching. At any point during this 6 month period you can contact us to change your mortgage back early if your situation has improved.

Work out your repayments

To work out what your repayments could look like switching to interest only, please use our handy Repayment calculator.

You just need:

your property price (current property value)
your deposit amount (your current property value price minus your current mortgage amount). For example, take your property value of £150,000 minus your outstanding mortgage balance of £60,000, your deposit amount is £90,000
your current interest rate
your remaining mortgage term - When adding your mortgage term always round down. For example, if your term is 11 years and 9 months, add 11 years. This will over-estimate your monthly cost but helps with what you need to budget for in the future. This is better than under-estimating and not having the funds to make your repayments.

Moving to interest-only payments will make your mortgage more expensive in the long-run. But by exactly how much will depend on a number of factors.

Your latest annual mortgage statement will be able to provide your outstanding balance, interest rate and remaining term, if you require a more up to date balance please contact us.

Repayment calculator

What could my repayments look like?

At the end of the 6 month period your mortgage account will switch back to capital and interest, meaning you will see an increase in your repayments.

We've created a useful table below which shows what your repayments would be if you switched to interest-only. If you would like to have a more detailed calculation specific to you, please contact us.

The below example is based on an interest rate of 7.75%.