Interest-Only Mortgage

By Justin Whitelock

Founder of Mortgage London (a trading style of City Finance Brokers Limited, authorised and regulated by the Financial Conduct Authority, FCA No. 766295)

A mortgage where the monthly payment covers the interest charged on the loan but does not reduce the amount originally borrowed.

Related glossary terms

Country Restrictions

Lender policy rules limiting applicants’ residence, employment, or income countries, varying significantly across specialist markets.

Loan to Income (LTI)

A measure that compares the mortgage amount with the borrower’s annual income, for example a 4.5x LTI loan.

Porting

The process of taking an existing mortgage product across to a new property when moving home, rather than redeeming it.

Asset-Based Mortgages & Lombard Lending

Asset-based mortgage is a broad label used for lending where the borrower’s assets play a major role in the credit decision instead of standard salary-led affordability alone. In UK practice, the phrase can refer to private-bank residential mortgages with asset-led underwriting, securities-backed Lombard facilities, or other asset-led structures. Despite the name, not every structure described