Interest Only Mortgages

With an interest only mortgage monthly payments represent only the interest due to the lender, and do not include repayment of capital.

Your total loan must be repaid at the end of the mortgage term.  Therefore you need to arrange additional investments, which will generate sufficient capital to repay the loan.

Advantages of an Interest Only Mortgage

  • You can choose from a variety of investments, some of which have tax advantages.
  • Should you move or arrange a remortgage, your investment can usually be reallocated to the new mortgage.
  • You only make a payment to the lender in respect of interest

 Disadvantages of an Interest Only Mortgage

  • Unlike a repayment mortgage, the amount of debt outstanding does not reduce over time
  • There is no guarantee that the investments chosen will grow sufficiently to repay your loan.
  • The loan must be repaid at the end of the term in one lump sum.

River at nightAFP Shrewsbury is a trading style of Gary Harper (FRN 755477) who is an Appointed Representative of AFP Partnership (FRN 300003). AFP Partnership are authorised and regulated by the Financial Conduct Authority. Certain products, including Buy to Let and Commercial mortgages, are not regulated by the Financial Conduct Authority. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOAN SECURED ON IT. For more information on interest only mortgages please call AFP mortgage advisers in Shrewsbury on 01743 364377 or e-mail


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