How to remortgage on an interest-only deal

If you’re currently paying interest-only on your mortgage, remortgaging can be a straightforward way to manage your monthly costs—particularly when your current deal is coming to an end. However, interest-only remortgages are assessed differently from repayment mortgages because the capital still needs to be repaid in full at the end of the term.

This guide explains how the process usually works, what you’ll need to consider, and the alternatives worth exploring.

Can you remortgage on an interest-only deal?

In many cases, yes—you may be able to remortgage on interest-only terms, either with your current lender or by switching to another provider.

Whether you can keep the same structure depends on factors such as:

• Your property value and loan-to-value (LTV)
• How close you are to the end of your current interest-only term
• Your repayment strategy (how you plan to repay the capital)
• Your affordability and circumstances
• Your credit history

Even if your current lender is willing to offer a new deal, it’s still worth comparing options—because the best outcome often comes from looking across the market.

How the remortgage process typically works (interest-only)

While every application is different, most interest-only remortgages follow a similar path.

1) Review your existing interest-only arrangement

Start by understanding what you’re currently paying and what’s expected at the end of the term.

You’ll want to check:

• The remaining balance
• The interest-only end date
• Whether your repayment vehicle is still on track (if you have one)
• Any changes in your circumstances since you took the mortgage out

2) Confirm your repayment plan for the capital

Lenders will want reassurance that the capital can be repaid when the interest-only term ends.

Common approaches include:

• A maturing investment or savings plan
• Sale of the property (where appropriate)
• Using additional funds at the end of the term

If your plan has changed, or you’re unsure whether it’s sufficient, it’s important to address this early—because it can affect what products you’re offered.

3) Assess your LTV and overall position

Your LTV can improve if your property has increased in value or if you’ve reduced the balance. A lower LTV can sometimes open up more options.

4) Prepare your application documents

Expect to provide information such as:

• Proof of identity
• Proof of income (where required)
• Details of your current mortgage
• Property information and valuation details (as requested)
• Information about your repayment strategy for the capital

5) Compare interest-only options and terms

Interest-only remortgages can vary by:

• Fixed vs variable rates
• Term length available
• How the lender structures the end date

A broker can help you compare products based on your goals—whether that’s keeping payments lower, extending the term, or preparing for a future switch.

What to consider before you remortgage interest-only

Interest-only can reduce monthly payments, but it’s not always the best long-term fit. Before you commit, consider:

Your end-of-term plan

The biggest question is simple: how will you repay the capital?

If you’re relying on a plan that may not mature as expected, you could face a shortfall later.

How your circumstances have changed

If your income, outgoings, or credit profile has changed since you first applied, it may affect what you can borrow and what terms you can access.

Whether repayment (or part-and-part) could be more suitable

Some borrowers find that switching to repayment—or using a part-and-part structure—can make the long-term position easier to manage.

Can you release equity on an interest-only remortgage?

It may be possible to release equity by increasing your borrowing, but it depends on lender criteria and your overall affordability.

If you’re considering this, it’s especially important to understand how the additional borrowing affects your capital repayment plan.

Alternatives if interest-only isn’t the right solution

If your interest-only term is ending or your repayment strategy needs strengthening, there are options to discuss:

• Switch to repayment (or part-and-part) to start reducing the capital
• Extend your term with your current lender (where available)
• Use additional savings/investments to reduce the balance
• Sell the property (if that’s a realistic plan)
• Equity release (where appropriate, and with the required advice)
• Retirement interest-only (RIO) for eligible borrowers

The best choice depends on your timeline, goals, and the practicality of repaying the capital.

Remortgaging an interest-only buy-to-let (BTL)

If your mortgage is buy-to-let and interest-only, you may find different lender options and product structures compared with residential interest-only.

It’s still worth reviewing whether switching to repayment could improve your long-term position—particularly if you’re looking to reduce risk around the capital repayment at the end of the term.

Interest-only vs repayment: a quick way to compare

A useful starting point is comparing what you’d pay under different structures.

• Interest-only: lower monthly payments, but the capital remains unchanged until the end of the term.
• Repayment: monthly payments are higher, but they typically reduce the capital over time.

If you’d like to pressure-test the numbers for your situation, speak to a remortgage specialist who can model the options based on your mortgage balance, term, and goals.

Get matched with a remortgage specialist

Interest-only remortgages can be a helpful tool for managing monthly payments, but they require a clear plan for repaying the capital. A specialist can help you understand what’s available and whether interest-only still makes sense for your circumstances.

If you’d like to explore your options, you can get matched with a remortgage specialist for a free, no-obligation chat.