Interest Only mortgage repayment plans

You can’t use this repayment option alongside any other mortgage repayment plan.

To be eligible to use this repayment plan, you’ll need to have a minimum amount of equity in your property. The amount required depends on where the property is located.

You can check your property’s region using our House Price calculator (opens in a new window).

Minimum equity required:

• £300,000 for Greater London
• £250,000 for Outer South East
• £200,000 for all other UK regions

When you apply for a Decision in Principle, we’ll automatically use an estimated property value to calculate your equity. If the valuation shows that the equity in your property is lower than the minimum required, you may no longer be eligible.

If you have a Part & Part mortgage (with both Interest Only and Repayment borrowing), the minimum equity requirement only applies to the Interest Only part of your loan. See table below.

Example based on Outer South East regions:

We work out how much equity you have in the property by looking at its estimated value, minus any outstanding mortgage you have on that property.

We’ll also do Land Registry checks before confirming it can be used as a mortgage repayment plan.

We can use up to 75% of your available equity (the property value minus what you still owe on your mortgage) towards your repayment plan.

The property must be for residential use. Commercial properties and properties owned in a Limited Company, aren't accepted.

What you’ll need:

A mortgage statement from the last 12 months.

This includes Cash ISAs and Premium bonds.

85% of the full savings amount can be used toward the mortgage repayment plan.

If the savings are also being used towards the deposit on a house purchase, the available funds must be sufficient to cover both the repayment plan and the deposit.

What you’ll need:

Latest three months bank statements or latest investment statements showing available funds and the name of the account provider.

This includes:

• Stocks and Shares ISAs
• non‑ISA stocks and shares
• unit trusts
• Open‑Ended Investment Companies (OEICs)
• investment bonds.

Any investments used as part of the mortgage repayment plan must be FCA regulated and UK based. You should check the FCA Firm Checker (opens in a new window) to confirm that your investments are with a registered firm.

75% of the full value of your investments can be used toward the mortgage repayment plan.

If the funds are also being used towards the deposit on a house purchase, the available funds must be sufficient to cover both the repayment plan and the deposit.

What you’ll need:

For each investment used, the latest investment statement showing available funds and the name of the account provider. Funds must have been held for at least three months.

These are workplace pensions where the level of income paid in retirement is usually based on salary and length of service. This could include final salary or career average pensions.

60% of the following will be used toward the mortgage repayment plan:

• the current value (if known)
• the projected value of the Pensions Commencement Lump Sum (PCLS)

What you’ll need:

For each pension used, the latest pension statement showing the current PCLS value and pension provider name. If a projected value has been provided, a pension statement confirming this projection must also be supplied.

These could be workplace or private pensions where the level of income in retirement is based on how much has been paid in, as well as the performance of the pension fund.

15% of the following will be used toward the mortgage repayment plan:

• the current value (if known)
• the projected value of the fund

What you’ll need:

For each pension used, the latest pension statement showing current fund value and pension provider name. If a projected value has been provided, a pension statement confirming this projection must also be supplied.