Interest-only mortgages explained. What exactly is a mortgage that is interest-only?
Discover how interest-only mortgages work, lenders presently providing interest-only discounts and whether an interest-only home loan is just the right selection for you.
An interest-only mortgage is a loan for a house enabling you to definitely pay back simply the attention on your own borrowing every month, rather than the capital.
What this means is your monthly premiums don’t pay off some of the loan – rather, you spend the complete quantity back at the conclusion for the home loan term in one single lump sum payment.
Just exactly How interest-only mortgages work. Whom provides mortgages that are interest-only?
The size of your debt stays the same throughout the mortgage term with an interest-only mortgage.
This might be distinct from a payment home loan, where you pay off both interest and capital every month. This permits you to chip away at your financial troubles therefore by the conclusion regarding the term you have completely paid back the original amount lent. »