Interest Only Mortgages

If you are looking for a mortgage on an interest only basis we have lenders that can help.

Not all mortgage providers offer Interest Only Mortgages, however we have a large panel of lenders that provide these mortgages.

If you have had bad credit registered such as missed payments, defaults or County Court Judgements we have lenders that can help you.

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Home > Mortgages > Interest Only Mortgages with Bad Credit

Interest Only Mortgages - Poor Credit Homeowner Loans

Interest only mortgages may not have enjoyed the best of reputations historically however an interest only mortgage certainly has a place in the right circumstances.

An interest only mortgage is exactly what the name implies. Interest on the loan amount is repaid, not the capital amount of the loan. The amount borrowed is then paid back at the end of the loan. With a repayment mortgage a small amount of the capital is repaid monthly along with the interest on the full amount.

Interest Only Mortgages were very popular prior to the financial crisis when many people were found to not have the capital at the end of the mortgage term to pay off the loan amount. Endowments were used with strong growth forecasts but many of these underperformed. As a result it is now much harder to get an interest only mortgage unless the deposit is large and planning is in place to settle the mortgage at the end of the agreed loan period. If an interest only mortgage is granted it is usually with the proviso that a repayment plan is in place, for example ISAs or other investments. The lender may periodically ask to check the performance and value of these investments to ensure there will be sufficient capital at the end of the loan period.

People who have an interest only mortgage currently may investigate the opportunities offered by switching to a repayment mortgage or by increasing contributions into an investment plan that will realise sufficient capital upon maturity. Anyone who has an interest only mortgage currently and may be concerned about settling the loan at the end of the loan agreement may consider talking to us about potential courses of action to ensure having viable options available when required.

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What to Expect from The Money Hub

We Gather Information Required to Search the Market

We gather some basic information about you using our quick online form

Conduct a Whole of the Market Comparision

We will search 100’s of providers to find you the lenders who are willing to approve your mortgage

Provide full service through to completion

We will show you rates along with the monthly repayments. This will not affect your credit score. We’ll also explain any fees if you progress at this point and as long as you are happy to proceed, provide you with the full service through to completion of your mortgage being accepted

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Interest Only Mortgage FAQ's

How do interest-only mortgages work?
This is where the mortgage payments you make only pay the interest charge for borrowing the money and does not pay back any of the capital you initially borrowed. It is extremely important when considering an interest only mortgage that you have a clear and feasible strategy to paying back the capital that you have borrowed. With interest only mortgages you should seek advice from a qualified mortgage broker to review your options.
Can I get an interest-only mortgage with bad credit?
There are mortgage lenders that will provide an interest only mortgage if you have bad credit registered or a low credit score. These lenders generally offer their products through specialist mortgage brokers. Whether you qualify for a bad credit interest only mortgage will depend upon many factors such as, when was the bad credit registered, what type of debt was the bad credit on, have you now satisfied the bad debt, how much equity in is your property, how much you can afford to borrow and how do you intend to repay this interest only mortgage at the end of the mortgage term.
How long can you have an interest-only mortgage?
Mortgage lenders do provide mortgage terms of 25 years for example, however the mortgage term will depend upon your ability to make the monthly payments and how you intend to you repay the capital that you initially borrowed. Instead of a full interest only mortgage, could you afford a repayment mortgage where the capital is being paid back or may be explore the option where part of the mortgage is repayment and another part is interest only? You should seek advice from a qualified mortgage broker to discuss your options in detail.