Looking for an interest only mortgage?
With an interest only mortgage, you will agree a set period during which time the only payments you will make will be to clear the interest accrued on the loan amount. For this reason, your monthly payments will usually be lower than if you opt for a repayment mortgage in which you are paying the interest and some of the loan balance off each month.
Interest only mortgages are usually set to automatically convert to repayment mortgages after a fixed term, so they can be useful for new buyers who are stepping on the property ladder for the first time and looking to keep costs down in the first year. However, because the loan balance does not decrease during the period, there is an increased risk of falling into negative equity if house prices fall.