INTEREST-ONLY PAYMENTS

What are interest-only payments?

Interest-only payments are a way to temporarily reduce your mortgage payments. Instead of paying back the capital (the amount you borrowed) plus interest, you pay only the interest on your loan.

Can I switch to interest-only payments?

You can request a temporary change to interest-only payments if you haven't missed any mortgage payments. You can only make the change for six months. You won't need an affordability check and provided you keep up the interest payments, your credit record won't be negatively affected. The switch will reduce your monthly payments for six months but will increase the overall cost of your mortgage over the full term. That's because you won't be paying off any of the capital during the interest-only period.

What happens after the six months?

When the interest-only period ends, you'll automatically go back to paying capital and interest payments. Monthly repayments will be higher than your previous capital and interest payments. That's because you're not paying off the capital during the interest-only period. Which means you have less time than originally agreed to pay back the balance of the loan.

Finding out more about interest-only payments

We will be happy to give you more information about interest-only payments. Please contact our Customer Support team on 0344 257 0427. They are available Monday to Friday between 9am and 5.30pm. 

If you can afford to make your current regular mortgage payments, you should do so, as customers who do not make changes will pay less over the term. It is important you understand that if you proceed with this change, the overall cost of your mortgage would increase.