The calculator below will help you to compare the cost of your mortgage on repayment or interest only methods or a combination of the two - Part and Part. This may help you to understand if your repayment strategy will be sufficient to repay the remaining balance off at the end of the mortgage term.
Interest only mortgage
With an interest only mortgage, the monthly payments over the term of the mortgage cover only the interest charged on the amount borrowed. This means that the interest only part of your mortgage, together with any fees or charges debited to your account will be owed in full at the end of the term. It is entirely your responsibility to ensure that at the end of the term the remaining balance on your mortgage is repaid in full by your repayment strategy. The maximum term for interest only is 25 years.
The maximum loan size permitted on interest only mortgages is dependent on your personal circumstances. Please speak to your dedicated Mortgage Adviser for more details.
Repayment mortgage
With a repayment mortgage the monthly payment you make covers both the interest charged and a portion of the original amount of money you borrowed. Providing you make all payments including any fees or charges when due, the loan will be repaid at the end of the term.
Part and Part
This is a combination of both repayment and interest only mortgage. For example, a loan of £50,000 could be made up of £30,000 repayment and £20,000 interest only, so there would be a remaining capital balance of £20,000 to repay at the end of your mortgage term. The maximum term for part and part is 25 years.
Options
If you are an existing customer and you have any concerns about repaying the remaining balance by the end of the mortgage term a range of options may be open to you including:
- conversion of the mortgage to repayment
- conversion to part and part
- extension of the term of the mortgage together with one of the above
- repayment of lump sums to reduce the remaining balance
- regular overpayments to reduce the remaining balance gradually. See the 'Flexible Payments Calculator'
- switching to a new product with lower monthly payments in conjunction with any of the above. An illustration of the new product will be provided to you and will be subject to availability and current lending criteria. There may be fees payable for certain products
Any changes will be subject to the terms and conditions of your existing mortgage including any early repayment charges if applicable and our current lending policy. Please refer to your original mortgage offer for details or contact us.
Please call our Customer Focus Line on 0345 266 8816 to discuss the options which are available for existing customers through the Society. Lines are open 9am - 8pm Mon - Thurs, 9am - 5.30pm Fri and 9am - 12 noon Sat.
Helpful information regarding interest only mortgages, including budget calculators, is also available from the Money Advice Service website.
Remember that in addition to the approximate payment shown you will have to repay the remaining balance off at the end of the mortgage term for any part of the mortgage on an interest only method. You need to ensure that your repayment strategy for this part of the loan is adequate.
This information provides an approximate indication of costs. Full details are available from the Society and when you apply for any of the above options.
This information does not contain all of the details you need to choose or vary a mortgage. Make sure that you read the separate Mortgage Illustration (MIL) or mortgage offer before you make a decision.