Compare Interest-Only Mortgages

With each monthly mortgage repayment only paying off interest, interest-only mortgages allow home buyers to keep their initial costs down. Compare interest rates and other features of interest-only mortgages from UK lenders in the table below.

Choose a mortgage type below

Interest only mortgages - sorted by lowest initial rate

  • Mortgage Type
    Buy to Let: For landlords purchasing a property for letting.
    Discount:The interest rate rises and falls with the provider’s standard variable rate but is set at a lower discounted rate for certain period.
    Fixed: The interest rate is fixed for a certain period – usually 1 to 5 years.
    Offset: Mortgage interest payments are offset against any savings you may hold.
    Tracker:The interest rate rises and falls with the Bank of England base rate.
    Variable: The interest rate rises and falls with the provider’s standard interest rate (SVR).
  • Initial Rate
    The introductory rate of interest that you will pay for a certain period of time depending on the mortgage type and term.
  • Initial Term
    The length of time that the initial interest rate applies to the mortgage.
  • Overal Cost For Comparison
    This is the mortgage’s Annual Percentage Rate (APR): the interest rate that you will be charged on your mortgage including all charges such as arrangement fees.
  • Max LTV
    The percentage of a property’s value for which the mortgage can be used.
    Example:75% loan to value = 25% deposit.
  • Fee To Apply
    This is the fee that must be paid to the lender when you take out the mortgage.
    If the fee charged is a % we have based the fee on a 150k mortgage.
  • ERC
    Will your lender charge you for repaying the mortgage early?
  • Use the arrows to compare whole of market


We may receive a commission from some of the companies we refer you to, these are displayed with a green 'More Info' button. Listings with a green 'Enquire' button refer you to an FCA regulated mortgage broker where we also receive a fixed fee. Tables initially display lenders from whom we receive commission, ordered by initial rate. Using the green arrows allows whole-of-market comparisons ordered by the chosen table column.

Mortgage data supplied by Defaqto. Last updated 11:30, 12/10/2015.

Interest only mortgages explained

If you're looking to get a head start on the housing ladder, or keep your costs low for a while, an interest only deal on your mortgage could be a very favourable arrangement. Instead of paying off a small chunk of your total debt each month, your costs will be limited to only the interest that has been accrued at that point. This could see your monthly outgoings reduced dramatically, especially when lending rates are low.

Typically, the interest only period will last from one to five years, during which time you'll be on a fixed or tracker interest rate, but you can sometimes find one for the entire term.

There are a number of reasons why it might be the best option. It could be that you are facing other expenses, such as starting your own business or saving for a life pursuit. Perhaps you can't be certain that you will be able to sustain your usual level of income for a time or maybe you have a found a place where your money can work harder for you than by paying off your home loan.

It does mean, of course, that by the end of the interest only period you will still owe the lender the same amount that you did to begin with. And if you reach the end of the mortgage and don't have other means to cover your shortfall, you could risk having your home repossessed. As such, you shouldn't look to rely on things like property prices going up or an uncertain windfall as justification for an interest only mortgage.

There is also a possibility that you could fall into negative equity with an interest only mortgage, owing more money than your house is worth, if the market slumps. Consider your options carefully.

Learn more about different types of mortgage with Know Your Money's guide.

Helpful links for mortgage issues - The government website's 'Owning and renting property' page features information on a range of issues including buying and selling property, property regulations and taxes, and mortgage aid schemes.

HMRC - HM Revenue & Custom's Stamp Duty page tells you everything you need to know about the tax including reliefs, exemptions, payments and penalties.

Council of Mortgage Lenders (CML) - The CML's consumer information pages feature a host of information on buying a property and choosing and managing a mortgage.

Citizens Advice Bureau - Citizens Advice Bureau's 'mortgage problems' section offers help and advice to people who are having trouble keeping up with their mortgage repayments.

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