Interest Only mortgages

With an interest only mortgage you will only make payments towards the interest on the amount you've borrowed. This means that you will still owe the full amount borrowed at the end of your mortgage term.

You will need to have a clearly understood and credible repayment strategy* in place to repay the amount borrowed at the end of the mortgage term.

Part & Part mortgages

It is possible to split a mortgage between two repayment methods, interest only and repayment (capital and interest). This means that you will repay part of the mortgage balance as repayment and the other part as interest only. This will reduce your mortgage balance at the end of your term, although you will still have an amount of the capital to pay back.

What does Leeds offer?

We offer a range of products for customers looking to borrow up to either 50% or 75% of the value of the property (known as the Loan to Value (LTV)).

For customers looking to borrow up to 50% LTV:

  • The whole mortgage can be on interest only.
  • You can choose to take a Part & Part approach for any combination of your choice, e.g. 25% interest only, 25% repayment.
  • The sale of the mortgaged property can be used as your repayment strategy as long as you have £150,000 equity in the property at the end of the term.

For customers looking to borrow between 51% and 75% LTV:

  • Up to 50% of the value of the property can be borrowed on interest only whilst the remaining amount (up to 25%) must be on repayment.
  • The sale of the mortgaged property can be used as your repayment strategy as long as you have £150,000 equity in the property at the end of the term.

When applying for an interest only mortgage, you will need to have a clearly understood and credible repayment strategy in place to repay this. All repayment strategies will be subject to approval by our mortgage underwriters.

Find out more information on interest only repayment strategies.

You can choose from applying online¹ (unless stated below), in branch or over the phone. You can also use our mortgage calculator and get a decision in principle today.

Warning:THE MORTGAGED PROPERTY (WHICH MAY BE YOUR HOME) MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

Interest Only 2 year Fixed Rate

Initial rate fixed up to and inc. 30/09/18Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.85% 5.69%5.1%50%£999 View
Fees Assisted / Max loan amount £1,250,000

Initial rate fixed up to and inc. 31/08/18Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.60% 5.69%5.1%50%£1999 View
Fees Assisted / Max loan amount £1,250,000
2.15%†5.69%5.1%50%£0 View
Remortgage Only / Fees Assisted / Max loan amount £1,250,000

Interest Only 2 year Fixed Rate - Part and Part

Initial rate fixed up to and inc. 30/09/18Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.99% 5.69%5.2%75%£999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV

Initial rate fixed up to and inc. 31/08/18Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.70% 5.69%5.1%75%£1999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
2.20%†5.69%5.2%75%£0 View
Remortgage Only / Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
RATES CORRECT AS AT 17 JUN 2016

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

Representative Example

A mortgage of £190,000 payable over 25 years initially on a fixed rate for 2 years at 1.85% and then on our current Standard Variable Rate of 5.69% (variable) for the remaining 23 years would require 24 monthly payments of £292.92 and 276 monthly payments of £900.92.

The total amount payable would be £446,717 made up of the loan amount plus interest of £255,683 and booking fee £0, product arrangement fee £999, valuation fee £0.

The overall cost for comparison is 5.14% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. The product arrangement fee is payable on application but is refundable should the mortgage not complete. A redemption fee of £199 will apply.

Additional Features

  • No Higher Lending Charge.
  • Only available to interest only applications.
  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • For fixed rates up to and including 30/09/18, Tapered Early Repayment Charges apply up to and including 30 Sep 2018.
  • For fixed rates up to and including 31/08/18, Tapered Early Repayment Charges apply up to and including 31 Aug 2018.
  • Free valuation upto £999.
  • Fees assisted in-house legal services for standard remortgages.
  • Interest calculated daily.
  • Available where part or all of the mortgage is on Interest Only. Sale of the mortgaged property can be used as a repayment strategy as long as you have a minimum of £150,000 equity in the property at the end of the term.

Interest Only 5 year Fixed Rate

Initial rate fixed up to and inc. 31/08/21Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
2.35% 5.69%4.6%50%£1999 View
Fees Assisted / Max loan amount £1,250,000
2.59%5.69%4.6%50%£999 View
Fees Assisted / Max loan amount £1,250,000
2.69%†5.69%4.5%50%£0 View
Remortgage Only / Fees Assisted / Max loan amount £1,250,000

Interest Only 5 year Fixed Rate - Part and Part

Initial rate fixed up to and inc. 31/08/21Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
2.55% 5.69%4.7%75%£1999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
2.79%5.69%4.6%75%£999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
2.89%†5.69%4.6%75%£0 View
Remortgage Only / Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
RATES CORRECT AS AT 18 MAY 2016

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

Representative Example

A mortgage of £265,000.00 payable over 25 years initially on a fixed rate for 5 years at 2.35% and then on our current Standard Variable Rate of 5.69% (variable) for the remaining 20 years would require 60 monthly payments of £518.96 and 240 monthly payments of £1,256.54.

The total amount payable would be £599,741.50 made up of the loan amount plus interest of £332,707.50 and booking fee £0, product arrangement fee £1999, valuation fee £0.

The overall cost for comparison is 4.59% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. The product arrangement fee is payable on application but is refundable should the mortgage not complete. A redemption fee of £199 will apply.

Additional Features

  • No Higher Lending Charge.
  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges apply up to and including 31 Aug 2021.
  • Free valuation upto £999.
  • Fees assisted in-house legal services for standard remortgages.
  • Interest calculated daily.
  • Available where part or all of the mortgage is on Interest Only. Sale of the mortgaged property can be used as a repayment strategy as long as you have a minimum of £150,000 equity in the property at the end of the term.

† Available for remortgages only.

Interest Only 2 year Discounted Rates

Initial rate variable for the first 2 years, (currently)TermsThen changing to the Society's SVR less a discount of 1.00% for a further 3 years, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.70%The Society's SVR less 3.99%4.69%5.69%5.2%50%£999 View
Fees Assisted / Max loan amount £1,250,000

Interest Only 2 year Discounted Rates - Part and Part

Initial rate variable for the first 2 years, (currently)TermsThen changing to the Society's SVR less a discount of 1.00% for a further 3 years, (currently)Then the Society's SVR thereafter, (currently)Overall cost for comparison (APRC)Max LTVProduct Arrangement Fee
1.75%The Society's SVR less 3.94%4.69%5.69%4.9%75%£999 View
Fees Assisted / Max loan amount £1,250,000 up to 65% LTV or £1,000,000 up to 75% LTV
RATES CORRECT AS AT 27 Jan 2016

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

Representative Example

A mortgage of £140,000.00 payable over 25 years initially on a 3.99% discount on our current Standard Variable Rate of 5.69% for 2 years and then a 1.00% discount on our current Standard Variable Rate of 5.69% for 3 years and then on our current Standard Variable Rate of 5.69% for the remaining 20 years would require 24 monthly payments of £198.33, 36 monthly payments of £547.17 and 240 monthly payments of £663.83.

The total amount payable would be £324,812.00 made up of the loan amount plus interest of £183,778.00 and booking fee £0, product arrangement fee £999, valuation fee £0.

The overall cost for comparison is 5.15% APRC representative.

This representative example assumes a mortgage completion date on the 1st day of a calendar month.

The above representative example is for illustration purposes only and may vary depending on your personal circumstances.

Unless otherwise indicated, these products are only available for house purchases or for customers remortgaging from another lender. The product arrangement fee is payable on application but is refundable should the mortgage not complete. A redemption fee of £199 will apply.

Additional Features

  • No Higher Lending Charge.
  • 10% capital repayments are allowed each year without incurring an Early Repayment Charge.
  • Tapered Early Repayment Charges applies for the first 2 years.
  • Free valuation upto £999.
  • Fees assisted in-house legal services for standard remortgages.
  • Interest calculated daily.
  • Available where part or all of the mortgage is on Interest Only. Sale of the mortgaged property can be used as a repayment strategy as long as you have a minimum of £150,000 equity in the property at the end of the term.

Important Information

No life cover or critical illness cover is included with this type of mortgage and we would strongly advise you to protect your family home by making sure you've enough life cover and critical illness cover to pay off your mortgage and (where applicable) any accured interest in the event of your death, or if you were unable to work due to accident or sickness.

If you choose to borrow all or part of the loan amount on interest only terms, a maximum of 50% loan to value (LTV) applies to Leeds Building Society interest only mortgages. If you intend to repay your mortgage in full at the end of the term through the sale of the mortgaged property, then you must hold a minimum of £150,000 equity in the property at the point of application.

The Society cannot advise you on the suitability of any particular repayment strategy. If you have any questions regarding the suitability of a repayment strategy, you should speak to an independent financial advisor.

¹If you apply for a mortgage online you will not receive advice from Leeds Building Society. You will need to make your own choice about which mortgage is suitable for you and we will not assess the suitability of that mortgage to your needs and circumstances. You will not benefit from the protections offered by an advised service. This is called an execution only transaction. If you would like to receive advice from us please call into one of our branches (find a branch) or contact us on 03450 50 50 75.

*Interest only repayment strategy

Before you apply for an interest only or Part & Part mortgage you will need to have a clearly understood and credible repayment strategy in place for the interest only part of the mortgage. It is your responsibility to ensure that you have sufficient funds to repay the amount borrowed on an interest only basis and (where applicable) any accrued interest at the end of the term. This could be using a savings or investment product, such as an endowment, pension or ISA, the sale of the mortgaged property or sale of other properties or a combination of these.

If you intend to sell the mortgaged property and this is your main residence, you must ensure that it is likely to provide you with enough funds to repay the loan and (where applicable) any accrued interest and allow you to buy another cheaper property.

Whichever option you choose, you must review your plans regularly to make sure you are on track to pay off the mortgage and (where applicable) any accrued interest on or before the end of the mortgage term and make changes if necessary.

At some point during the term of the mortgage we'll contact you to check that your repayment strategy is still in place and that it is still reasonable to expect that your repayment strategy has the potential to repay the amount borrowed and (if applicable) any interest accrued under the mortgage at the end of the term.