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Interest only mortgages from Yorkshire Building Society

Interest only mortgages

Find out if an interest only mortgage is right for you.

Early Repayment Charges apply and other fees and charges may apply.

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You have asked to borrow {{mortgageListing.customer.loan | currency:'£': 0}}. The minimum amount we will lend is £25,001. Please adjust your property value or depositmortgage outstanding amount.

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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 you are retired or if the term of the mortgage goes beyond your stated retirement age, or age 70 which ever is earlier
  • 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
  • This can be used to cover up to a maximum of 50% of the value of the property. 
  • Total borrowing can go to 75% LTV by using an additional repayment strategy or borrowing on a  Capital Repayment basis
  • The property must have a minimum equity of £200,000 at the time of application
  • The current value of the savings must cover 100% of the I/O element.
  • The savings must have been held for a minimum of 12 months.
  • The savings must be in pounds sterling.

Evidence required
Latest savings statement.

Existing Endowments
  • The projected mid-point maturity value must cover 100% of the interest only borrowing.
  • The endowment must have been in place for at least 12 months. 
  • The end of the endowment term must not exceed end of mortgage term.
  • It must be a UK Policy provided by a regulated firm.

Evidence required
Latest endowment policy statement, dated in the last 12 months.

General Investments
  • The current value of the investments must cover 100% of the I/O element of the mortgage.
  • The investments must be in pounds sterling.

Evidence required
Stocks and Shares ISA, Unit Trusts/OEIC, Investment Bonds: Copy of latest statement and/or
Stocks and Shares ISA: Copy of share certificates/statements containing evidence of share-holdings and their valuation.


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 in branch or by telephone (see below).

Alternatives to interest only mortgages


Use your savings to offset against the balance of your mortgage and reduce the interest you pay.



Mortgages that follow the Bank of England Base Rate - you could save money while the Base Rate remains low but your payments could also go up.


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.


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Need some help?

Visit us

You can visit us in branch to speak to a mortgage adviser.


Call us

Speak to one of our friendly mortgage advisers about your options

0345 166 9510*

  • 8.00am - 8.00pm, Mon-Fri
  • 9.00am - 1.00pm, Sat


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