Interest-Only Mortgages

With an interest only mortgage you make monthly repayments for an agreed period but this will only cover the interest on your loan.

As the name suggests, with an interest only mortgage your monthly payment only covers the interest charges on your loan - you're not actually reducing the loan itself. You'll normally also have to pay into another investment or savings plan that'll hopefully pay off the loan at the end of the term.

In this section, we look at the pros and cons of taking out an interest-only mortgage, and look at some of the ways you might choose to back your plan up.