Interest Only Remortgage Deals

If you are coming to the end of your mortgage deal, looking at the various products available on the remortgage market could help you save money. To help you find the right remortgage deal it’s important to understand the range of different products on the market. In a tough economic climate it may be tempting to remortgage to an interest-only product, but remember that at the end of the deal you’ll still owe full price for the house.

How does an Interest Only Remortgage work?

As the name suggests, an interest only mortgage allows you to keep your monthly repayments low by paying only the interest on the amount borrowed. Whilst this offers a way into home ownership if your finances are stretched, it is important to plan how you intend to pay off the capital sum otherwise serious financial difficulties may result.

The Advantages of an Interest Only Remortgage include:
  • Much lower monthly repayments
  • Interest only mortgages can make sense if you expect the value of your property to rise (but in an uncertain market that is a risky approach).
The Disadvantages of an Interest Only Remortgage include:
  • Borrowers do not build any equity in their property, unlike with a repayment mortgage
  • If you wish to make any profit on your home when you come to sell it, you are solely reliant on increasing property values – a risky approach in an uncertain market.

What to look for when choosing an Interest Only Remortgage

When looking for an interest only remortgage it is important to take advice, given the higher long-term risk borrowers may be exposing themselves to. Thinking about more than just the interest rate and considering how you are going to repay the capital sum is crucial. One way of mitigating the risk with an interest only mortgage may be to look at deals which convert to repayment mortgages after a set period of time, such as three years.

Finding the right Interest Only Remortgage Deals – our service explained

There are various different types of interest only remortgage deals available, including fixed rate and variable rate deals. If you’re contemplating remortgaging, it is important to get advice on what kind of mortgage suits your financial circumstances first. We compare interest only remortgage deals from across the market, to find the right remortgage deal for your circumstances – simply fill in our 30 second enquiry form. What’s more, our FCA authorised mortgage brokers can provide expert, unbiased advice to get you the right flexible remortgage quote for your needs.

Even if you have adverse credit history, CCJs or an IVA, we can help you find the right interest only remortgage deal.

Estimated property value
Mortgage Balance
popular searches
latest news

Remortgage loans drove overall mortgage lending in Wales during the third quarter of 2017, according…Read more »

The total value of privately owned UK housing stock has exceeded £6 trillion for the…Read more »

The 0.25% increase to the Bank of England base rate will mean an average rise…Read more »

free guides & tools