Compare Fixed Rate Interest Only Mortgages

Choosing an interest only mortgage keeps your mortgage payments low and selecting a fixed rate mortgage means you have security in mortgage costs over the term. _Compare mortgages, lenders and deals for fixed rate interest only mortgages in the table below.

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Last updated on 04 March 2021.

Fixed-Rate Interest-Only Mortgages FAQ

What is a fixed-rate interest-only mortgage?

Fixed-rate interest-only mortgages allow borrowers to buy houses and repay their mortgages with just interest, paid at a rate that is frozen for a limited period.

When is the mortgage loan repaid?

As with other interest-only mortgages, a fixed-rate interest-only mortgage loan is often repaid when the term ends, in the form of a lump sum.

Why do people seek fixed-rate interest-only mortgages?

One of the great benefits from paying just interest on a mortgage during the term at a fixed rate is that the regular payments you make are greatly reduced, as compared to a conventional repayment mortgage or a variable-rate deal.

Will rate rises affect a fixed-rate deal?

No. The point of fixed-rate deals is that they don’t move, even if the Bank of England raises rates, or the market rate rises. As a result, interest is frozen and you can save money, as you continue to pay at a specific rate.

Are there incentives on fixed-rate interest-only deals?

Yes. While incentives are at the discretion of the provider, you may find some deals offering cashback, but the sums available through this incentive will vary. Check terms and conditions to learn what cashback entails.

What is APRC?

The annualised percentage rate of charge is a metric used to help determine the overall cost of your mortgage when you take interest as well as additional fees and charges into account. It gives you a more realistic idea about how affordable a deal is, and makes for a good way to compare deals.

What additional charges and fees do mortgages entail?

You may find your mortgage requiring you to pay charges such as valuation fees or even a simple product fee. There is also a charge applicable if you overpay on a mortgage beyond a certain point, depending on terms and conditions.

What is LTV?

LTV (loan-to-value) is the ratio that helps you determine the size of a mortgage loan, relative to the value of a property you wish to buy. It has an inverse relationship to the deposit you pay, so an LTV of 80 percent would require your mortgage to cover 20 percent of a property’s value.

Is a higher LTV more suitable for a first-time buyer?

Higher LTVs mean a smaller deposit to save up for, which can help first-time buyers climb the housing ladder more quickly. However, higher LTVs mean larger loans, which carry greater risk to a provider. As a result, they will likely charge higher interest.

Why does finding a good interest rate matter?

A mortgage is often the most significant financial undertaking in your life, paid back over many years. To be in a position to get on the housing ladder and afford a home, you need to find an appropriate rate of interest to match your financial situation.

Where can I find the best fixed-rate interest only mortgages?

NerdWallet have a comparison table specially designed to let you compare the best deals for this type of mortgage. Always check terms and conditions before applying for a mortgage.

NerdWallet has selected Koodoo to provide you with this information-only online comparison service on a non-advised basis. NerdWallet will receive a share of the commission that Koodoo earns from the lender or from our partnered broker, Fluent Mortgages.

Koodoo is the trading name of Mortgage Power Limited, which is authorised and regulated by the Financial Conduct Authority (FRN 845978), and is a registered company in England and Wales (company registration number 10978680), with a registered address at Scale Space, 58 Wood Lane, London, W12 7RZ

Fluent Mortgages Ltd is authorised and regulated by the Financial Conduct Authority (FRN 458914), and is a registered company in England and Wales (company registration number 10978680), with a registered address at 102 Rivington House, Chorley, New Road, Horwich, Bolton, BL6 5UE