Repayment methods.

There are three different ways of repaying your loan. These are repayment, interest-only, and a combination of repayment and interest-only.

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

Repayment mortgage

Every month, your payments go towards reducing the amount you owe as well as paying off the interest (see Figure 1). This means that each month you're paying off a small part of your loan. Your annual statement will show your loan getting smaller. However, in the early years your monthly payments will mainly go towards paying off the interest, so the amount you owe won’t go down much at the start.

Graphic of how mortgage payments can change

Interest-only mortgage

Your monthly payment pays only the interest charges on your loan – you don't pay off any of the loan amount (see Figure 2). This means your monthly payments will be less than if you had a repayment mortgage. However, the total cost of an interest-only mortgage will be higher because you'll be paying interest on the full loan amount throughout the mortgage term.

With an interest-only mortgage, you'll need to know from the start how you're going to find a lump sum to repay the loan at the end of the mortgage term. When you apply, we'll ask you to show us solid plans that should provide enough money to repay everything you owe by the end of the mortgage term.

From time to time, we may ask you to show us that your repayment plan(s) remains on track to repay the mortgage. If we think your plan may not be enough to repay everything you owe by the end of the term, we'll try to contact you to discuss other arrangements. These may include transferring part, or all, of your loan to a repayment mortgage.

You're responsible for regularly checking that your plan remains on track. If your plan does not give you enough money to repay your mortgage at the end of the term, you may have to sell your property.

Interest-only mortgages are only available when the loan amount is less than 75% of our latest valuation of the property.

Graphic of an interest only mortgage

Acceptable plan types

Information you must give us

Our assessment of acceptable values

Endowment policies (UK)

Copy of latest projection statement dated within the last 12 months.

Endowment companies will present three growth rates.
We allow up to 100% of the projected amount using the middle figure.

Stocks and shares (UK)

Copy of share certificates, nominee account statement or confirmation from a recognised broker containing evidence of share holdings and their valuation.

We'll accept up to 80% of the latest valuation of the stocks and shares, ISA, OEIC or investment bond (if the latest valuation is greater than £50,000).

Stocks and shares ISA (UK)

Copy of latest statement dated within the last 12 months.

As above

Unit trusts, open-ended investment companies (OEICs) (UK)

Copy of latest statement dated within the last 12 months.

As above

Investment bonds (UK)

Copy of latest statement dated within the last 12 months.

As above

Pension (UK)

Copy of latest projection statement dated within   the last 12 months.

For the purpose of backing an interest-only mortgage, we can use a maximum of 15% of the latest projected value if this projection is greater than £400,000.

Sale of second home (UK)

Property details, confirmation of ownership,  evidence of the amount of any mortgage debt.

We'll check the ownership of the property and assess its value. We'll deduct any amount you owe that’s secured against the property and allow you to use up to 80% of the amount left over (if this is over £50,000).

Endowment policies (UK)


Information you must give us

Copy of latest projection statement dated within the last 12 months.

Our assessment of acceptable values

Endowment companies will present three growth rates.
We allow up to 100% of the projected amount using the middle figure.

Stocks and shares (UK)


Information you must give us

Copy of share certificates, nominee account statement or confirmation from a recognised broker containing evidence of share holdings and their valuation.

Our assessment of acceptable values

We'll accept up to 80% of the latest valuation of the stocks and shares, ISA, OEIC or investment bond (if the latest valuation is greater than £50,000).

Stocks and shares ISA (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Unit trusts, open-ended investment companies (OEICs) (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Investment bonds (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Pension (UK)


Information you must give us

Copy of latest projection statement dated within   the last 12 months.

Our assessment of acceptable values

For the purpose of backing an interest-only mortgage, we can use a maximum of 15% of the latest projected value if this projection is greater than £400,000.

Sale of second home (UK)


Information you must give us

Property details, confirmation of ownership,  evidence of the amount of any mortgage debt.

Our assessment of acceptable values

We'll check the ownership of the property and assess its value. We'll deduct any amount you owe that’s secured against the property and allow you to use up to 80% of the amount left over (if this is over £50,000).

Combination of repayment and interest-only mortgage

It's possible to split a mortgage between repayment and interest-only. This means that at the end of the mortgage term you'll still have an amount of the mortgage to pay off, which you'll need to do using a lump sum. So, as with an interest-only mortgage, you'll need to make sure you have solid plans to repay this amount at the end of the term.


Acceptable Repayment Plans

Acceptable plan types

Information you must give us

Our assessment of acceptable values

Endowment policies (UK)

Copy of latest projection statement dated within the last 12 months.

Endowment companies will present three growth rates.
We allow up to 100% of the projected amount using the middle figure.

Stocks and shares (UK)

Copy of share certificates, nominee account statement or confirmation from a recognised broker containing evidence of share holdings and their valuation.

We'll accept up to 80% of the latest valuation of the stocks and shares, ISA, OEIC or investment bond (if the latest value is greater than £50,000).

Stocks and shares ISA (UK)

Copy of latest statement dated within the last 12 months.

As above

Unit trusts, open-ended investment companies (OEICs) (UK)

Copy of latest statement dated within the last 12 months.

As above

Investment bonds (UK)

Copy of latest statement dated within the last 12 months.

As above

Pension (UK)

Copy of latest projection statement dated within the last 12 months.

For the purpose of backing an interest-only mortgage, we can use a maximum of 15% of the latest projected value if this projection is greater than £400,000.

Sale of second home (UK)

Property details, confirmation of ownership,  evidence of the amount of any mortgage debt.

We'll check the ownership of the property and assess its value. We'll deduct any amount you owe that’s secured against the property and allow you to use up to 80% of the amount left over (if this is over £50,000).

Endowment policies (UK)


Information you must give us

Copy of latest projection statement dated within the last 12 months.

Our assessment of acceptable values

Endowment companies will present three growth rates.
We allow up to 100% of the projected amount using the middle figure.

Stocks and shares (UK)


Information you must give us

Copy of share certificates, nominee account statement or confirmation from a recognised broker containing evidence of share holdings and their valuation.

Our assessment of acceptable values

We'll accept up to 80% of the latest valuation of the stocks and shares, ISA, OEIC or investment bond (if the latest value is greater than £50,000).

Stocks and shares ISA (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Unit trusts, open-ended investment companies (OEICs) (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Investment bonds (UK)


Information you must give us

Copy of latest statement dated within the last 12 months.

Our assessment of acceptable values

As above

Pension (UK)


Information you must give us

Copy of latest projection statement dated within the last 12 months.

Our assessment of acceptable values

For the purpose of backing an interest-only mortgage, we can use a maximum of 15% of the latest projected value if this projection is greater than £400,000.

Sale of second home (UK)


Information you must give us

Property details, confirmation of ownership,  evidence of the amount of any mortgage debt.

Our assessment of acceptable values

We'll check the ownership of the property and assess its value. We'll deduct any amount you owe that’s secured against the property and allow you to use up to 80% of the amount left over (if this is over £50,000).


Need to talk to us?

You can speak to one of our mortgage advisers in person, or chat things over on the phone.


Call us on 0345 850 3705
Mon-Fri 8am - 8pm Sat 9am - 4pm


Come into branch - you'll need to book an appointment beforehand