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Today’s Best Interest Only Mortgage Rates Compared
Looking for the best rate on an interest-only mortgage? Our comprehensive guide tells you all you need to know about comparing interest-only deals.
Interest-only mortgages can help make buying property more flexible and, in some cases, cost-effective. Only paying the interest each month keeps payments low and makes this popular for buy-to-let mortgages, as well as homeowners whose income is heavily commission or bonus based.
If you want to know what today’s best interest-only mortgage rates are, you’ve come to the right place.
The table below shows a sample of rates for fixed and variable rate interest only mortgages.
Looking for more rates and deals?
We can match you with a mortgage broker who can provide you with up-to-date bespoke rates and deals from across the entire market.
Last updated December 2023
Please note that the above rates were accurate at the time of writing, but are always subject to change at the lender’s discretion. Speaking to a mortgage broker is the best way to find the most up-to-date deals.
How to compare interest-only mortgage rates
Rates tables can be a good starting point to get a rough idea of the interest-only mortgage market, but bear in mind that they are not the best way to compare every deal available.
Using a specialist mortgage broker is a better alternative for the following reasons…
- You’ll get access to the entire market
- They will round up bespoke rates and deals for you
- Your chances of landing the best rate available will increase
Get in touch and we will match you with a broker who specialises in interest-only mortgages today.
0808 189 2301 Interest-only mortgage rate calculator
Using the information from the table at the top of this page, you can get an idea of what your repayments might be using our mortgage calculator.
For comparison purposes, this tool returns capital and repayment results and lets you convert them into interest-only.
Mortgage Repayment Calculator
This calculator can tell you the monthly and overall cost of your mortgage, based on the loan amount, interest rate, and term length.
Your Results:
The monthly repayments on a mortgage would be
The total amount paid at the end of your mortgage term would be
Get started with an expert broker to find out how much they could help you save on your mortgage repayments.
Get StartedTry a few different combinations for a variety of options. But remember, this is a guide only and doesn’t take into consideration your unique circumstances. For more accurate borrowing options, speak to a whole-of-market mortgage broker.
Can you get a better rate with a higher deposit?
In many cases, yes. A higher deposit lowers the loan to value (LTV) and is less of a risk to the lender. These borrowers are more attractive to mortgage providers so rates are usually lower.
But LTVs fall into bands so, for example, a 40% deposit might get you into a lower band than a 39% deposit, but you may not lower your rate further by increasing your deposit amount to 42%.
Typically, the best rates are reserved for borrowers with a deposit of at least 40%. In most cases, a deposit of 20% or more is needed to secure an interest-only mortgage.
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Are the rates any different if you’re remortgaging?
Potentially, as some mortgage lenders have exclusive rates for existing customers and others have products geared towards customers who are switching from capital repayment to interest only.
For example, earlier this year, Nationwide was offering an interest-only remortgage deal with a rate of 4.69%. This was a two-year fixed rate with a maximum LTV requirement of 60%.
Elsewhere, TSB was offering a 2-year fixed rate remortgage deal for interest-only borrowers with the same LTV cap and an introductory rate of 4.59%.
Keep in mind that these rates have been cited for example purposes and are always subject to change.
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Why use Online Mortgage Advisor?
If you’re looking for the latest interest-only mortgage rates, your best bet is to use our matching service so we can pair you with a broker who specialises in this mortgage type and has access to every deal on the market.
By using us, you are guaranteed to gain access to all of the latest rates, bespoke deals for you and specialist advice about securing the ideal interest-only mortgage for you.
To speak to an interest-only mortgage specialist call us on 0808 189 2301 or enquire online.
FAQs
Remortgage rates are typically in line with standard purchase rates so, the table at the top of this article is a good indication for what’s available right now, assuming that there are no risk factors present, such as a high loan-to-value ratio or adverse credit.
The interest rates themselves are usually no different to comparable capital and repayment mortgages, though keep in mind that interest-only mortgages can be more expensive overall as the loan amount does not diminish over the mortgage term (unless you can make optional capital repayments).
This means that the interest charges will be based on 100% of the loan amount throughout the term, rather than a decreasing percentage like with capital repayment mortgages.
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About the author
Pete, an expert in all things mortgages, cut his teeth right in the middle of the credit crunch. With plenty of people needing help and few mortgage providers lending, Pete found great success in going the extra mile to find mortgages for people whom many others considered lost causes. The experience he gained, coupled with his love of helping people reach their goals, led him to establish Online Mortgage Advisor, with one clear vision – to help as many customers as possible get the right advice, regardless of need or background.
Pete’s presence in the industry as the ‘go-to’ for specialist finance continues to grow, and he is regularly cited in and writes for both local and national press, as well as trade publications, with a regular column in Mortgage Introducer and being the exclusive mortgage expert for LOVEMoney. Pete also writes for Online Mortgage Advisor of course!
Pete Mugleston
Mortgage Advisor, MD