Interest-only mortgage
Cards & borrowingA mortgage where you pay only interest each month and repay the balance at the end.
Overview
Interest-only mortgages require a separate plan to repay the original loan.
They often have stricter eligibility criteria.
Why it matters
- Monthly payments are lower but the balance remains.
- You must have a clear repayment strategy.
- It can carry more risk if property values fall.
FAQs
Do interest-only mortgages affect my credit score?
Payments are reported like any mortgage. Missed payments can harm your score.
Are interest-only mortgages common?
They are less common than repayment mortgages and are more restricted.
Related terms
Take control of your credit health
Get the complete credit toolkit — all features included.
Start building creditInstant setup. No credit check. Cancel anytime.