Interest Only Mortgage
With an interest-only mortgage, your monthly payment pays the interest charges on your loan, not any of the original capital borrowed, this means your payments will be less than on a repayment mortgage.
At the end of the term you’ll still owe the original amount you borrowed from the lender and will need to clear this borrowing from an alternate source. This could be from the sale of the mortgaged property, sale of a different property or the use of savings and investments you may have available.
Interest Only mortgages are not right for everybody in fact the vast majority of people should always consider a repayment mortgage over this option but they do still have their merits.
Interest Only mortgages can be used to purchase for residential property and buy to let investment property.