Understand your repayment options
Here we lay out the options for you to consider carefully.
Capital repayment
With a capital repayment plan, your monthly payment covers the interest charged on your mortgage and it also reduces the outstanding balance each month in line with the term selected. With this repayment plan, you can ensure your mortgage is fully paid off at the end of the mortgage period.
What you get with the repayment option:
- Interest and capital repaidYour monthly payment covers the interest and also reduces the total balance outstanding.
- SecurityProviding all payments are made, the mortgage will be repaid in full at the end of the agreed mortgage term.
- Choose your repayment termUp to a maximum of 40 years.
Capital repayment is a repayment option on all of our mortgage products: fixed rate and tracker mortgages.
Interest only
With an interest-only mortgage, your monthly payment covers only the interest on your loan, enabling you to invest to pay off your mortgage at the end of the mortgage term or freeing up cash to spend elsewhere.
By repaying only the interest on your mortgage, your monthly payments are lower than with an equivalent capital repayment mortgage.
Note: You are responsible for making your own arrangements to repay your mortgage at the end of the mortgage term. This could be through an endowment scheme or some other savings and investment plan. Your home may be repossessed if you do not have sufficient funds to repay the capital balance outstanding at the end of the term.
- sole applicants must have a minimum income of £75,000 per annum excluding bonus, commission, overtime and rental income
- for joint applications, at least one applicant must have an individual income of £75,000 per annum excluding bonus, commission, overtime and rental income
- for a Buy-to-Let interest-only mortgage, you must meet our Buy-to-Let criteria
What you get with the interest-only option:
- Interest onlyThe monthly payment covers just the interest and the original capital amount borrowed remains outstanding throughout the term of the loan.
- Lower monthly paymentsBecause you are not repaying the capital, your monthly payments will be lower than with a capital repayment mortgage.
- Choose your mortgage loan termUp to a maximum of 25 years (maximum of 40 years for Buy-to-Let)
- Lower borrowing limitUp to a maximum of 75% loan to value of the purchase price, or the valuation of your property (whichever is lower). This is also known as your loan to value. For example a £100k mortgage with a £80k mortgage = 80% loan to value.
| Borrowing amount |
Maximum loan to value |
|---|---|
| Up to and including £400,000 |
75% |
| Over £400,000 to £1 million |
75% |
| Over £1 million to £2 million |
65% |
| Over £2 million |
50% |
| Borrowing amount |
Up to and including £400,000 |
|---|---|
| Maximum loan to value |
75% |
| Borrowing amount |
Over £400,000 to £1 million |
| Maximum loan to value |
75% |
| Borrowing amount |
Over £1 million to £2 million |
| Maximum loan to value |
65% |
| Borrowing amount |
Over £2 million |
| Maximum loan to value |
50% |
If you are interested in applying for a part capital repayment mortgage and a part interest only mortgage, please contact us.
Important considerations
You must be able to demonstrate you have a suitable repayment strategy in place.
Get an idea of what your mortgage could look like with one of our calculators.
When you are considering your repayment strategy the following apply:
- property: you can only use up to 75% of its value and this should not be from the sale of your main residence
- endowments: Should be based on the lowest estimated projection quoted on the latest endowment policy statement
- other investments and savings: should be based on their current value
Contact us
Our lines are open 08:00 to 20:00 Monday to Saturday, and 09:00 to 18:00 on Sundays. Calls may be monitored and recorded. Opening hours within our mortgage departments may vary.
How to apply
New Application
Applying for a mortgage involves two stages, firstly getting a Decision in Principle; secondly making a mortgage application.
Already started an application?
If you started a mortgage application over the phone or online, you can log on to complete it or track its progress.
Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage.