Interest Only Mortgages | YBS

Interest only mortgages
Find out if an interest only mortgage is right for you.
Early Repayment Charges and other fees and charges may apply.
What is an interest only mortgage?
An interest only mortgage is where your monthly payments only cover the interest charged on the amount you borrow and you don't pay off any of the loan amount. In order to pay off the loan amount at the end of the term, you will need to have an acceptable repayment strategy.
Is it suitable for me?
Customers who are new to Yorkshire Building Society and looking to take out a mortgage on interest only must meet the following:
- You can borrow up to a maximum of 75% Loan to Value.
- Interest only borrowing for debt consolidation is not permitted.
- Interest only borrowing is not permitted if the term of your mortgage goes beyond your stated retirement age or age 70, whichever is sooner. The term can only exceed your stated retirement age or age 70, whichever is sooner where income is not required to make the loan affordable.
- You must have an acceptable repayment strategy in place to repay the loan at the end of the term.
- You must provide evidence of your repayment strategy during the application process.
- You must also provide this evidence again at least once during the mortgage term.
What are the acceptable repayment strategies?
There are a number of acceptable repayment strategies that can be used to support an interest only mortgage. Please see the table below for further details.
Acceptable Repayment Strategy | Policy Rules |
---|---|
Sale of Mortgage Property at the end of term |
|
Sale of other UK property |
Evidence Required: If any property is mortgaged by another lender, a copy of the latest mortgage statement. |
Pension Lump Sum |
Evidence Required: Latest Pension Statement. |
Savings |
Evidence required |
Existing Endowments |
Evidence required |
General Investments |
Evidence required |
How do I apply?
If you want to apply for an interest only mortgage, you will need to speak with one of our mortgage advisors by telephone.
Alternatives to interest only mortgages
Tracker mortgages
Link your mortgage repayments to the Bank of England’s base rate. The interest rate on a tracker mortgage changes with the Bank of England base rate, which means your payments could rise and fall.Offset
Use your savings to offset against the balance of your mortgage and reduce the interest you pay.Fixed rate mortgages
Fix your mortgage interest rate, so it won’t change over a set period of time, regardless of what is happening to interest rates elsewhere.Before you apply
Why not try our mortgage calculators to get an idea of how much you could borrow for your mortgage and what the repayments would be.Call us or book an appointment
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