Interest‑Only Mortgage Criteria

When clients explore mortgage options, many want clear guidance on interest‑only mortgage criteria and how these products work in practice. Interest‑only and part‑and‑part mortgages can offer lower monthly payments compared to full repayment mortgages, but they also come with specific rules and responsibilities. One major UK lender currently provides both options across its purchase and remortgage range, including for first‑time buyers, and their criteria give a helpful example of what lenders typically look for.

Key Features (Example Criteria from a High-Street Lender)

• Interest-Only maximum: 75% loan-to-value (LTV)
• Part-and-Part maximum: 85% LTV
• Maximum term: 40 years or retirement age (whichever is sooner)
• Maximum loan amount: £5 million

Understanding Interest‑Only Mortgage Criteria

With an Interest-Only mortgage, you only pay the interest on your loan each month.

• Monthly payments may be lower than a repayment mortgage of the same size
• At the end of the term, the full balance must be repaid
• Lenders typically require a clear repayment strategy — such as selling the property or using approved investment plans

Part‑and‑Part Mortgages and How They Fit Into Interest‑Only Mortgage Criteria

This hybrid option lets you repay part of the loan while keeping the rest on Interest-Only.

• Monthly payments are lower than full repayment
• You’ll still have a balance to repay at the end
• The same repayment strategy rules apply, with up to 75% LTV allowed on the Interest-Only portion

Eligibility Criteria for Interest‑Only Mortgages (Based on One Lender’s Guidance)

• Minimum income: £75,000 for sole applicants, £100,000 for joint (unless one earns £75,000)
• Minimum lease term: 70 years at application
• Minimum equity: Required if selling your main residence is the repayment plan

Not typically eligible if:

• Using Interest-Only with schemes like Shared Ownership or Right to Buy
• Retired or term extends into retirement
• Raising capital to repay unsecured debt
• Property is a holiday home or not your main residence.

Why Whole‑of‑Market Advice Matters for Interest‑Only Mortgage Criteria

These criteria are based on one major lender’s published guidance. Other lenders may offer different terms — some more flexible, others more restrictive. That’s why tailored, whole-of-market advice is essential.

How MDJ Mortgages Supports You

At MDJ Mortgages, we:

• Review the full market to match your circumstances with the right lender
• Explain the risks and benefits of Interest-Only vs repayment
• Handle the application process and ensure your repayment strategy is clearly presented
• Offer fee-free advice to keep things flexible and transparent

Next Steps

If you’re considering an Interest-Only mortgage — or just want to know if it’s right for you:

👉 Book a free consultation
👉 Let us compare lender criteria across the market
👉 Get clear, confident advice tailored to your goals

MDJ Mortgages is here to make complex criteria simple — and to help you move forward with clarity.

Risk Warning: Your home may be repossessed if you do not keep up repayments on your mortgage.