Paying off your Interest Only Mortgage

Let’s go through your repayment plan options…

As the name suggests, with an interest only mortgage, you only pay interest charges on the amount of money you borrow. This means your actual loan amount isn’t repaid or reduced.

So when that mortgage comes to an end, you’ll still owe whatever you borrowed. To pay off your mortgage balance in full, you need a repayment plan in place.

Why a mortgage repayment plan is important

If you’re unable to repay in full at the end of your mortgage, your home may need to be sold to pay back the outstanding balance. Should you wish to pay off your mortgage without selling up, it’s important to have a repayment plan which shows how you intend to do so.

It’s never too soon to start your repayment plan

To encourage all our interest only customers to start a repayment plan, we keep in touch to find out how you intend to repay your loan – and if needed, offer assistance and support.

We also urge customers to keep in touch and update us on any changes to their plans. That way, we can help you be ready when your interest only mortgage ends.

If your repayment plan is already up and running

If you’ve already taken steps to get a mortgage repayment plan up and running – and feel confident you can pay off your mortgage when it ends – we’d still like to hear from you.

Whether it’s an endowment policy, savings, pension policy or sale of property, we recommend you fill in a Repayment Intentions Form and let us know.

Keep in touch and keep us informed

If you’re at all concerned about paying off of your interest only mortgage, then please speak to one of our team as soon as possible. We can take you through the options open to you and agree the next steps to take. For example, something we could recommend would be speaking to our mortgage consultants to review your current mortgage arrangements.

For options on repaying your interest only mortgage

0113 2257966 (option 1)

Happy to answer your questions

What is a mortgage repayment plan?

Quite simply, a mortgage repayment plan is a way to pay back all of the money you’ve borrowed when your interest only mortgage comes to an end. It could be savings, endowment or pension policy or the proceeds from a property sale. The important thing is that it will provide enough to pay off the balance of your mortgage in full when it comes to an end. Otherwise your home may have to be sold to repay your mortgage loan.

How do I know my plan is on track?

To find out how your repayment plan is on track to repay your mortgage balance, get in touch with your Independent Financial Adviser or contact whoever your savings or investment is with.

What if I don't have a plan or it's under-performing?

If you don’t have anything in place yet – or your plan is under-performing – get in touch now and we can talk through the available options.  Even if you have a few years left on your mortgage, the sooner you act the better. Leaving things too late leaves you with less choices. The number to call is 0113 225 7966 (option 1), Monday to Friday 9-5.

What if I'm confident my plan is on track?

That’s great news. But it’s always worth checking that things are going as planned. So if you need any assistance or think your plan is starting to under-perform, please don’t hesitate to get in touch.

Can I switch from Interest Only to a Capital and Interest mortgage?

If you want to make the switch from an Interest Only to a Capital and Interest mortgage, you can apply to change the way you make repayments. First step is to call our Direct Mortgage Unit on 03450 505 062.

My mortgage is coming to an end, what do I need to do?

If you’re worried that your repayment plan won’t pay off your mortgage balance, please call us as soon as you can on 0113 225 7966 (option 1), lines are open Monday to Friday 9-5. If you’re confident your plan will pay off the balance at the end of the mortgage, you can request a redemption statement on 03450 540911.

What if I need further advice?

We’re here to help, so you can speak to our Direct Mortgage Unit on 03450 50 50 62 to find out more about the services and assistance we provide for our members. There are also other organisations you may find useful:

Step Change: a free independent charity offering expert debt advice and solutions.
t: 08000 274 992 w: www.stepchange.org

Money Advice Service:  a free service that provides clear, unbiased advice to help you make informed choices.
t: 0300 500 500 w: moneyadviceservice.org

Independent Financial Advice:  here’s where you can find independent financial advice.  
w: mylocaladviser.co.uk
w: unbiased.co.uk
w: findanadviser.org