Interest Only vs Repayment

Interest only vs repayment: which is right for you?

Repayment mortgages gradually pay off both the interest and the capital, so at the end of the term you own your home outright. Monthly payments are higher, but you're guaranteed to be mortgage-free. Use our repayment calculator to see a full amortisation schedule.

Interest-only mortgages only cover the interest each month, so payments are lower. However, you still owe the full loan amount at the end of the term and must have a strategy to repay it (investments, savings, property sale, etc.). Buy-to-let investors often favour interest-only as it maximises rental yield.

Most residential lenders now require a credible repayment strategy for interest-only mortgages. Read our mortgage guide for a full breakdown, or speak to our advisers to discuss which option suits your circumstances.