Updated 28 August 2026
Interest Only Mortgage Calculator UK
Interest-only mortgages cut the monthly payment sharply and leave the entire debt standing on the final day. This calculator shows both sides: what you pay each month, what you still owe at the end, and what you would need to save every month to cover it. It also compares a part-and-part split, which is what most lenders will actually offer a residential borrower in 2026.
- Monthly payment
- Capital shortfall at term end
- Required savings plan
- Part-and-part comparison
Interest-only calculator
Your interest-only figures
Monthly payment
£1,067 /month
Still owed at the end
£250,000
Total interest paid
£320,000
Full repayment payment
£0
Same loan, capital included
Monthly saving now
£0
Versus full repayment
Extra lifetime cost
£0
Interest you pay on top
Save this per month
£0
To clear the capital
The real monthly cost. Interest only looks cheaper, but once you add the £0 a month you would need to save to clear the capital, the true outgoing is £0, compared with £0 on a full repayment mortgage. Interest only is only genuinely cheaper if the repayment vehicle outperforms the mortgage rate.
- Capital still owed at the end £0
- Interest paid over the term £0
- Capital repaid during the term £0
How the split changes everything
Moving even a quarter of the loan onto a repayment basis transforms the position at the end of the term. This is why part-and-part is the compromise most residential lenders prefer.
| Interest-only portion | Monthly payment | Owed at end of term | Total interest |
|---|
Who can still get an interest-only mortgage in 2026?
Residential interest-only lending never disappeared after the 2014 rule changes, but it narrowed sharply. Lenders now require a credible, evidenced repayment strategy, and most apply all of the following:
- A minimum income: commonly £75,000 single or £100,000 joint, though a few lenders go lower.
- A maximum LTV of 50 to 75%, well below what a repayment mortgage would allow.
- An acceptable repayment vehicle: an ISA or investment portfolio with evidenced current value, a pension lump sum, a second property, or the sale of the mortgaged property where there is substantial equity.
- Periodic reviews: the lender will check during the term that the vehicle is still on track.
Buy-to-let is a different world: interest only remains the default there, because rental income is assessed against the interest payment and landlords typically plan to sell or refinance. Use the buy to let calculator for those numbers.
When interest only genuinely makes sense
- Lumpy income. Contractors, business owners and commission-based earners who can clear large chunks of capital in good years but need low fixed monthly commitments.
- A near-term downsize. Older borrowers with substantial equity planning to sell and buy smaller within the term, and several lenders accept this explicitly, subject to a minimum equity requirement.
- A short bridge. Where you know a defined lump sum is arriving, such as a maturing investment, a property sale or a pension crystallisation.
- Buy to let. Where the tax and cash-flow arithmetic usually favours it.
What happens if the vehicle falls short? At the end of the term the lender wants the full balance. If you cannot pay, the realistic options are to extend the term where age allows, switch the balance to repayment at a much higher monthly cost, use a retirement interest-only or lifetime mortgage if you are over 55, or sell the property. Lenders write to interest-only borrowers years in advance for exactly this reason, so engage early, because options shrink as the term end approaches.
Interest-only questions, answered
How much cheaper is interest only each month?
Typically 25 to 35% cheaper on a 25-year term at current rates. On £250,000 at 5.12%, interest only costs about £1,067 a month against roughly £1,479 on full repayment, a saving of around £412. That saving is not free money: it is the capital you are not repaying, and it is still owed in full at the end.
Can I switch from interest only to repayment?
Usually yes, and lenders generally welcome it. You can often switch part of the balance rather than all of it, which softens the payment jump. Some lenders allow the change without a full new application; others treat it as a material change requiring affordability checks. Ask your lender directly before assuming.
What is a part-and-part mortgage?
A split where part of the loan repays capital and interest while the rest is interest only. It gives you a lower payment than full repayment with a much smaller balance outstanding at the end. On a 50/50 split of £250,000, you would owe £125,000 at term end rather than the full £250,000, a far more manageable number to plan for. Drag the slider above to model any split.
Do I pay more interest overall on interest only?
Substantially more, because the balance never falls. On £250,000 at 5.12% over 25 years, interest only costs about £320,000 in interest against roughly £193,700 on repayment, around £126,300 more, and you still owe the original £250,000.
Can I overpay an interest-only mortgage?
Yes, and it works well because every overpayment reduces the balance and therefore the monthly interest immediately. The usual 10% annual limit before an early repayment charge still applies on fixed deals. Model it on the overpayment calculator.