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Interest Only mortgages

With an interest only mortgage you will only make payments towards the interest on the amount you've borrowed. This means that you will still owe the full amount borrowed at the end of your mortgage term.

You will need to have a clearly understood and credible repayment strategy* in place to repay the amount borrowed at the end of the mortgage term.

Part & Part mortgages

It is possible to split a mortgage between two repayment methods, interest only and repayment (capital and interest). This means that you will repay part of the mortgage balance as repayment and the other part as interest only. This will reduce your mortgage balance at the end of your term, although you will still have an amount of the capital to pay back.

What does Leeds Building Society offer?

On 12th September 2016, we updated our interest only mortgage criteria.

Here's what that means for you:

  • Our maximum loan for interest only mortgages has gone up from 50% to 60% Loan to Value (LTV). This means that you can borrow up to 60% of the value of your property on an interest only basis.
  • If you take out a part and part mortgage, you can still borrow up to 75% LTV. Up to 60% of the mortgage can now be paid back on an interest only basis.
  • We've also changed our criteria for people who want to pay back their mortgage by selling their home and moving to a smaller one. The old criteria required a fixed amount of equity in the property, but the updated criteria takes into account regional differences in property prices. When you apply, we need you to tell us whereabouts you'd like to downsize to at the end of your mortgage. We'll then carry out a check to make sure your plan is plausible.

We've changed the information below to reflect the criteria updates.

We offer a range of products for customers looking to borrow up to 60% or up to 75% of the value of the property (LTV).

For customers looking to borrow up to 60% LTV:

  • The whole mortgage can be on interest only.
  • You can choose to take a Part & Part approach for any combination of your choice.
  • Selling your property and downsizing can be used as a repayment strategy, but we'll have to carry out a check to make sure your plan is plausible.

For customers looking to borrow between 60% and 75% LTV:

  • Up to 60% of the value of the property can be borrowed on interest only. The remaining amount (up to 15%) must be on repayment.
  • Selling your property and downsizing can be used as a repayment strategy, but we'll have to carry out a check to make sure your plan is plausible.

When applying for an interest only mortgage, you will need to have a clearly understood and credible repayment strategy in place to repay this. All repayment strategies will be subject to approval by our mortgage underwriters.

Find out more information on interest only repayment strategies.

You can choose from applying online** (unless stated below) or over the phone. You can also use our mortgage calculator and get a decision in principle today.

Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Legal Assisted 2 Year Interest Only Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/10/20Then the Society's SVR less 1% discount up to and inc. 31/10/23, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
1.79% 4.69%5.69%4.9%60%£999 View
Fees Assisted / Max loan amount £1,250,000
2.12% 4.69%5.69%4.9%60%£0 View
Fees Assisted / Max loan amount £1,250,000

Legal Assisted Part and Part 2 Year Interest Only Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/10/20Then the Society's SVR less 1% discount up to and inc. 31/10/23, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
1.69% 4.69%5.69%4.9%75%£1999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
1.99% 4.69%5.69%4.3%75%£0 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
RATES CORRECT AS AT 07 AUG 2018

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Representative Example

A mortgage of £120,000.00 payable over 25 years initially on a fixed rate for 2 years at 2.12% and then a 1.00% discount on our current Standard Variable Rate of 5.69% for 3 years and then on our current Standard Variable Rate of 5.69% for the remaining 20 years would require 24 monthly payments of £212.00, 36 monthly payments of £469.00 and 240 monthly payments of £569.00.

The total amount payable would be £278,532.00 made up of the loan amount plus interest of £158,532.00 and application fee £0, product fee £0, valuation fee £0.

The overall cost for comparisons is 4.9% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

  • A product fee is payable on application but is refundable should the mortgage not complete.
  • A mortgage exit fee of £199 will apply.
  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • For fixed rates until 31/08/20, Tapered Early Repayment Charges apply up to and including 31 October 2020.
  • Free Standard valuation up to £999.
  • Interest calculated daily.
  • Life cover or critical illness cover is not included with this mortgage but we strongly advise borrowers to protect their family home by making sure they have enough life cover and critical illness cover to pay off the mortgage (and where applicable any accrued interest) in the event of death or becoming unable to work due to accident or sickness.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender, where the term doesn't extend beyond the stated retirement age and the customer is not using Shared Equity or Shared Ownership schemes.

Legal Assisted 5 Year Interest Only Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/10/23Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
2.24% 5.69%4.5%60%£999 View
Fees Assisted / Max loan amount £1,250,000
2.39% 5.69%4.5%60%£0 View
Fees Assisted / Max loan amount £1,250,000

Legal Assisted Part and Part 5 Year Interest Only Fixed Rate Mortgages

Initial rate fixed up to and inc. 31/10/23Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
2.36% 5.69%4.6%75%£999 View
Fees Assisted / Max loan amount £1,250,000
RATES CORRECT AS AT 07 AUG 2018

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Representative Example

A mortgage of £180,000.00 payable over 25 years initially on a fixed rate for 5 years at 2.36% and then on our current Standard Variable Rate of 5.69% (variable) for the remaining 20 years would require 60 monthly payments of £354.00 and 240 monthly payments of £853.50.

The total amount payable would be £407,114.00 made up of the loan amount plus interest of £226,080.00 and application fee £0, product fee £999, valuation fee £0.

The overall cost for comparison is 4.6% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. A product fee is payable on application but is refundable should the mortgage not complete. A mortgage exit fee of £199 will apply.

  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges apply up to and including 31 October 2023.
  • Free Standard valuation up to £999.
  • Interest calculated daily.
  • Available where part or all of the mortgage is on Interest Only. Sale of the mortgaged property can be used as a repayment strategy but equity must make downsizing plausible at the end of the mortgage term.

2 year Interest Only Discount Rate Mortgages

Initial rate variable for the first 2 years, (currently)TermsThen the Society's SVR less 1% discount for 3 years, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
1.80% The Society's SVR less 3.89%4.69%5.69%5.2%60%£999 View
Max loan amount £1,250,000
2.14% The Society's SVR less 3.55%4.69%5.69%5.2%60%£1499 View
Max loan amount £1,250,000 / £1,000 Cashback upon completion

Part and Part 2 year Interest Only Discounted Rate Mortgages

Initial rate variable for the first 2 years, (currently)TermsThen the Society's SVR less 1% discount for 3 years, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Fee
1.85% The Society's SVR less 3.84%4.69%5.69%4.9%75%£999 View
Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
2.20% The Society's SVR less 3.49%4.69%5.69%5.0%75%£1499 View
Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV / £1,000 Cashback upon completion
RATES CORRECT AS AT 10 NOV 2017

Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.

Representative Example

A mortgage of £140,000.00 payable over 25 years initially on a 3.89% discount on our current Standard Variable Rate of 5.69% for 2 years and then a 1.00% discount on our current Standard Variable Rate of 5.69% for 3 years and then on our current Standard Variable Rate of 5.69% for the remaining 20 years would require 24 monthly payments of £210.00, 36 monthly payments of £547.17 and 240 monthly payments of £663.83.

The total amount payable would be £325,092.00 made up of the loan amount plus interest of £184,058.00 and application fee £0, product fee £999, valuation fee £0.

The overall cost for comparison is 5.2% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. A product fee is payable on application but is refundable should the mortgage not complete. A mortgage exit fee of £199 will apply.

  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges applies for the first 2 years.
  • Free Standard valuation up to £999.
  • Only available to Interest Only applications.
  • Interest calculated daily.
  • Available where part or all of the mortgage is on Interest Only. Sale of the mortgaged property can be used as a repayment strategy but equity must make downsizing plausible at the end of the mortgage term.

Important Information

No life cover or critical illness cover is included with this type of mortgage and we would strongly advise you to protect your family home by making sure you've enough life cover and critical illness cover to pay off your mortgage and (where applicable) any accured interest in the event of your death, or if you were unable to work due to accident or sickness.

If you choose to borrow all or part of the loan amount on interest only terms, a maximum of 60% loan to value (LTV) applies to Leeds Building Society interest only mortgages. If you intend to repay your mortgage in full at the end of the term through the sale of the mortgaged property, then you must hold enough equity to realistically afford your new property. The specific amount required will depend on where your new property is located.

The Society cannot advise you on the suitability of any particular repayment strategy. If you have any questions regarding the suitability of a repayment strategy, you should speak to an independent financial advisor.

¹If you apply for a mortgage online you will not receive advice from Leeds Building Society. You will need to make your own choice about which mortgage is suitable for you and we will not assess the suitability of that mortgage to your needs and circumstances. You will not benefit from the protections offered by an advised service. This is called an execution only transaction. If you would like to receive advice from us please call into one of our branches (find a branch) or contact us on 03450 50 50 75.

*Interest only repayment strategy

Before you apply for an interest only or Part & Part mortgage you will need to have a clearly understood and credible repayment strategy in place for the interest only part of the mortgage. It is your responsibility to ensure that you have sufficient funds to repay the amount borrowed on an interest only basis and (where applicable) any accrued interest at the end of the term. This could be using a savings or investment product, such as an endowment, pension or ISA, the sale of the mortgaged property or sale of other properties or a combination of these.

If you intend to sell the mortgaged property and this is your main residence, you must ensure that it is likely to provide you with enough funds to repay the loan and (where applicable) any accrued interest and allow you to buy another cheaper property.

Whichever option you choose, you must review your plans regularly to make sure you are on track to pay off the mortgage and (where applicable) any accrued interest on or before the end of the mortgage term and make changes if necessary.

At some point during the term of the mortgage we'll contact you to check that your repayment strategy is still in place and that it is still reasonable to expect that your repayment strategy has the potential to repay the amount borrowed and (if applicable) any interest accrued under the mortgage at the end of the term.

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** If you apply for a mortgage online you will not receive advice from Leeds Building Society. You will need to make your own choice about which mortgage is suitable for you and we will not assess the suitability of that mortgage to your needs and circumstances. You will not benefit from the protections offered by an advised service. This is called an execution only transaction. If you would like to receive guidance from us please call our Direct Mortgage Unit on 03444 175 785. We’re open 8am to 8pm Monday to Friday and 9am to 5pm Saturday.
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cuRIOus about our new Retirement Interest Only mortgages? Please contact a mortgage broker who can discuss how this new way of borrowing in retirement might work for you. At present we cannot provide these mortgages directly

Warning: THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

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