Interest Only Mortgage Deals
Monday 30 January, 2023
Many see interest only mortgages as an option to help reduce their monthly mortgage repayments, especially during more challenging times. The lower monthly payment amount is due to not repaying the capital of the loan and only repaying the interest portion of the loan. However, to repay the mortgage amount borrowed, you can use any savings or other capital assets you may already own as part of your repayment plan.
With all the changes that have taken place in the mortgage market, it is recommended to assess and review your current mortgage deal to find out if there are other more suitable options available to you. We recommend you give our mortgage broking team a call on 01707 872000 to help decide if you have the most suitable mortgage rate and mortgage product for your specific circumstances.
The mortgage rates that will be available to you will depend on your individual financial situation. However, we recommend you contact our mortgage broker team so we can review the market and show you the best available rates unique to your circumstances.
For example, our latest interest only mortgage deal is 4.36%, which represents one of the lowest rates currently on the market.
Interest Only Mortgage Deal – Option 1
£200,000 loan with a 25-year term
Fixed Rate of 4.36% until 31.05.2028
Monthly Payment £726.67
Early repayment charges will apply until 31.05.2028
The overall cost for comparison is 5.8% APRC
For the interest only fixed rate mortgage you would pay 64 payments at a fixed rate of 4.36% with monthly payments of £726.67. This would be followed by 236 payments at a variable rate, which is currently 6.29%, with monthly payments of £1,048.33. The total amount payable is £495,429.
The illustration is based on an interest only mortgage.
Interest Only Mortgage Deal – Option 2
£250,000 loan with a 25-year term
Fixed Rate of 4.36% until 31.05.2028
Monthly Payment £908.33
Early repayment charges will apply until 31.05.2028
The overall cost for comparison is 5.8% APRC
For this fixed rate mortgage, you would pay 26 payments at a fixed rate of 4.36% with monthly payments of £908.33. This would be followed by 236 payments at a variable rate, which is currently 6.29%, with monthly payments of £1,310.42. The total amount payable is £618,908.
Please note: If you are reading this this after 17/01/2023 it is possible that these rates may no longer be available. The actual rate available will be dependent on your own individual circumstances.
Vladimir Dolinnij, Mortgage broker offering mortgage advice in Leytonstone, Leyton, East London and Essex said:
“We understand the difficulties that people are facing as a result of the economic challenges and interest rate changes. This is just one of the reasons people have to try to find ways to lower their monthly outgoings. It is possible that, for some people, an interest only mortgage may offer a solution, so they are seriously thinking about changing to an interest only mortgage to ease the financial burden in the short term.
However, I would stress that it is important to engage with a specialist mortgage broker first. An adviser will give you professional advice, an important step to securing an interest only mortgage deal that fits with your individual financial circumstances.”
If you would like to find out which interest only mortgage deal will be the most suitable for your specific situation, then please call us on 01707 872000.
As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments. The information contained within this article is for guidance only and does not constitute advice which should be sought before taking any action or inaction.
