How to get an interest-only mortgage as a first-time buyer

Interest-only mortgages can be an option for some first-time buyers who need lower monthly payments and have a clear, credible plan to repay the balance at the end of the term. However, compared with repayment mortgages, interest-only lending is more restricted and is assessed more cautiously.

This guide explains how interest-only works in practice, what lenders typically expect from first-time buyers, and alternatives that may suit you better.

Can a first-time buyer get an interest-only mortgage?

It’s possible, but it’s not common. Interest-only mortgages are offered by a limited number of lenders, and many are cautious because the loan balance does not reduce during the mortgage term.

That means lenders must be comfortable that you can repay the outstanding amount when the mortgage ends. If your repayment plan is unclear, or if the lender believes the risk is too high, they may decline the application.

For first-time buyers, the challenge can be even greater because interest-only is often treated as a specialist product rather than a standard route onto the property ladder.

Are interest-only mortgages a good idea for first-time buyers?

For some buyers, interest-only can make sense—particularly where monthly affordability is the main concern. Because you’re not paying down the capital each month, your payments may be lower than a repayment mortgage.

That said, whether it’s a good idea depends on your circumstances, including:

• Your repayment plan: how you will clear the balance at the end of the term.
• Your time horizon: whether you can realistically execute the plan when the mortgage matures.
• Your financial resilience: how you would cope if interest rates rise or your income changes.

Interest-only may also be considered if you expect your situation to improve later—for example, if you anticipate building up savings or increasing income and may be able to switch to a repayment structure at a future point.

What lenders usually look for

While each lender has its own policy, common factors include:

1) Deposit level

A larger deposit is often required for interest-only mortgages. Some lenders may expect a deposit of at least 20%, and in some cases more.

A bigger deposit can help demonstrate lower risk and may improve the range of products you can access.

2) A credible repayment vehicle

With interest-only, the capital does not reduce over time. Lenders will want confidence in how the balance will be repaid at the end of the term.

A repayment plan may involve options such as:

• selling the property
• switching to a repayment mortgage
• using savings or investments
• receiving funds from an inheritance or other lump sum

Lenders may treat different repayment methods differently. The key is having a plan that is clear, realistic, and supported by evidence where required.

3) Credit history

A strong credit record can matter more for niche products. If you have adverse credit, it may reduce the number of lenders willing to consider interest-only.

It’s also worth being mindful that multiple applications in a short period can affect your credit file.

4) Income and affordability

Even though interest-only can reduce monthly payments, lenders still assess affordability. Your income, existing commitments, and overall financial position will be reviewed.

Some lenders may also have minimum income expectations for interest-only, which can be a barrier for certain first-time buyers.

5) Mortgage experience

Because interest-only is less common for first-time buyers, some lenders may prefer applicants with a track record of managing mortgage borrowing.

This doesn’t mean it’s impossible, but it can narrow the lender pool and increase the importance of presenting your case clearly.

How much you could borrow (and why it may differ)

Borrowing limits for first-time buyers are usually based on income multiples and affordability assessments. In practice, interest-only borrowing can be more restrictive than repayment, even if the income multiple appears similar on paper.

The exact amount you can borrow depends on:

• lender policy and product rules
• your deposit
• your income and outgoings
• the strength of your repayment plan
• your credit profile

What alternatives should first-time buyers consider?

If interest-only feels like a stretch, there are other ways to keep monthly payments manageable while still building equity.

Longer-term repayment mortgages

Extending the term can reduce monthly payments. Many borrowers consider longer repayment terms, then look to reduce the term later if their finances improve.

Part-and-part mortgages

A part-and-part structure splits the loan between repayment and interest-only. This can help balance affordability with capital reduction.

Switching strategy

Some buyers plan for a future move from interest-only to repayment once their circumstances improve. If this is part of your thinking, it’s important to understand how switching would work in practice and whether it would be feasible at the time.

Can you get an interest-only buy-to-let mortgage as a first-time buyer?

Possibly—but it’s a different market from residential mortgages.

Many buy-to-let products are interest-only, and lenders typically assess affordability based on rental income rather than solely on your personal income. Requirements can include a larger deposit, a clean credit profile, and sufficient income to cover payments during any void periods.

Buy-to-let lenders may also expect some level of experience, which can reduce the number of lenders available to first-time buyers.

If you’re considering property investment, treat it as a business decision: lenders will want to see that the rental income is realistic and that the plan is robust.

Can you get interest-only through Help to Buy?

Help to Buy-style schemes are generally aimed at supporting purchases on repayment terms. Interest-only is typically not aligned with the structure of these schemes.

If you’re relying on government support to get onto the ladder, it’s worth comparing what’s available on repayment products and whether those options better match your deposit and affordability position.

How a broker can help with an interest-only application

Because interest-only lending for first-time buyers is niche, the process can be more complex than applying for a standard repayment mortgage.

A broker can help by:

• checking which lenders are likely to consider your circumstances
• understanding how your repayment plan will be viewed
• helping you avoid unnecessary applications that could weaken your credit position
• comparing interest-only with other structures that may achieve similar affordability goals

A well-prepared application matters in this category. Presenting the right information clearly can be the difference between a lender accepting or declining.

Key takeaways

• Interest-only mortgages may be available to first-time buyers, but lender choice is limited.
• Lenders focus heavily on your deposit, credit profile, income, and—most importantly—a credible repayment plan.
• Interest-only can reduce monthly payments, but the balance still needs to be repaid in full at the end of the term.
• Alternatives such as longer-term repayment or part-and-part mortgages may provide a better balance of affordability and capital growth.

If you’re considering interest-only, it’s worth approaching it as a structured plan rather than a short-term affordability fix.