With this type of mortgage your monthly payment only covers the interest payments on your loan, not any of the original capital borrowed. This means your monthly payments will be less than a repayment mortgage, but at the end of the mortgage term you will still owe the original amount you borrowed from the lender.

These types of mortgages are becoming increasing difficult to obtain, unless you have an acceptable repayment strategy, have a large amount of equity in your home or are borrowing on a buy to let basis.

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