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Mortgages
Whether you’re looking to buy your first home, move somewhere bigger, or simply get a better deal, we can offer a mortgage that suits you.
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About Us
Established in Newport in 1869 to help local people build homes, we now help people across Wales and England buy properties and save for their future.
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We offer many of our mortgages on an interest-only or mixed repayment/interest-only basis.
What is an interest-only mortgage?

 

There are two main types of mortgage borrowing:

  • Repayment mortgages, also known as capital and interest mortgages
  • Interest-only mortgages.

These days, most mortgages are taken out on a repayment basis.

If you have a repayment mortgage, each month you will pay off some of the loan you borrowed to purchase your property (the capital), plus interest.

By the end of the mortgage term, you will have fully paid off your original loan and the interest, provided that you have maintained all required payments.

With an interest-only mortgage, monthly payments to your lender only cover the interest on the amount borrowed – they don’t pay back the capital loan used to purchase the property.

This means that you will have to repay the outstanding capital by the end of the mortgage term.

To make sure you can pay back your mortgage, you will need a suitable repayment strategy that will cover the outstanding loan amount.

You can also combine the two borrowing types – as an example, if you were borrowing £100,000, you could borrow £80,000 on a repayment basis and £20,000 on an interest-only basis.

Is an interest-only mortgage right for me?

 

Interest-only mortgages can be tempting, as the monthly repayments can be much lower due to the fact that you're only paying the interest.

But you have to remember there’s a big lump sum that needs to be paid off!

If you want an interest-only mortgage, you must have a suitable repayment strategy (also referred to as a repayment vehicle) to pay off the capital balance at the end of the mortgage term. 

At Monmouthshire Building Society, we can only offer you an interest-only mortgage if we consider your repayment strategy to be acceptable.

How can I pay off my interest-only mortgage?

 

When we consider interest-only mortgage applications we accept the following repayment strategies:

  1. With-profits or unit-linked endowment policy

  2. Sale of another UK property

  3. Downsizing
  4. Pension lump sum*
  5. Cash savings 

* Please note we only accept repayment from the 25% portion of your pension that you can withdraw tax-free. This is because you should reserve the other 75% for living expenses during retirement.

Some people plan to pay off their interest-only mortgage with an expected inheritance or by selling their company, but these are riskier strategies which we would not accept.

Our Criteria for Residential Interest-Only Mortgages

Please note that this only applies to residential lending. To discuss our Buy-to-Let interest only criteria, please book an appointment with one of our Mortgage Advisers.

  • Maximum loan to value (LTV) on interest-only loans is 50%. 
  • Maximum LTV on mixed interest-only and repayment loans is 80%. The interest-only element must not exceed 50% LTV
  • New customers - at least one of the applicants will need a minimum sole income of £50,000

 

Interest-Only and Mixed Repayment Mortgage Rates

See below for the mortgages from our range that can be taken out on an interest-only or mixed repayment basis.

Please note these products are for residential mortgages only.

To discuss interest-only Buy-to-Let mortgages, please book an appointment with a Mortgage Adviser.

House Purchase Mortgages

2 Year Discount Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
0.99% 4.4% APRC 80% £1,999 - More details
1.59% 4.4% APRC 80% - - More details
2 Year Fixed Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
1.63% 4.5% APRC 80% £999 - More details
5 Year Fixed Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
1.94% 3.8% APRC 65% £999 - More details
2.14% 3.9% APRC 65% - - More details
2.06% 4.0% APRC 80% £999 - More details
2.39% 4.1% APRC 80% - - More details

Remortgage Rates

2 Year Discount Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
1.49% 4.4% APRC 80% £999 Free valuation More details
2.09% 4.4% APRC 80% - Free valuation More details
2 Year Fixed Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
1.42% 4.4% APRC 65% £1,495

Free valuation

Assisted legal fees

More details
1.88% 4.3% APRC 65% -

Free valuation

Assisted legal fees

More details
5 Year Fixed Rate Mortgages
Initial interest rate % Overall cost for comparison Maximum loan to value Product fee Additional Features  
2.08% 3.6% APRC 65% £1,495

Free valuation

Assisted legal fees

More details
2.25% 3.6% APRC 65% -

Free valuation

More details
1.98% 3.6% APRC 75% £999

£500 cashback

More details
2.18% 3.6% APRC 75% -

£500 cashback

More details

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