IVA : What Is An Interest Only Mortgage?

An "Interest Only" mortgage is a mortgage where the mortgagee only repays the interest due on the loan.

This is the opposite to a "capital and repayment" mortgage which is where the mortgagee makes monthly repayments which include part of the capital borrowed as well as interest due. An interest only mortgage runs for a set term and it is up to the mortgagee to make arrangements for the capital to be repaid at the end of that term.

Switching from a capital and repayment mortgage to an interest only mortgage can sometimes be a way of increasing a monthly contribution in an Individual Voluntary Arrangement (IVA).

If you would like to know more about Individual Voluntary Arrangements (IVAs) call 0800 088 7503 to speak to one of our trained Individual Voluntary Arrangement advisers. Alternatively, visit myIVA-Adviser.com and download one of our free guides designed to inform you about Individual Voluntary Arrangements (IVAs).

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