With an interest only mortgage, your monthly payments do not cover the money you borrowed to buy your home.

The money you borrowed is called capital. Your lender charges you interest on it.

You only pay back the interest each month.

You have to pay back all the capital at the end of the mortgage term.

The mortgage term is how long you agreed to pay back what you owe, for example 25 years.

If you have an interest only mortgage

Make sure that you will have enough money to pay off the mortgage when the mortgage term ends. For example, in a savings account, ISA or pension lump sum.

Check that your plans for repaying your mortgage will give you enough money for this.

Money Helper has advice on repaying an interest only mortgage.

If you cannot pay back what you owe

This guide can help if you cannot pay back what you owe and:

• you are near the end of your interest only mortgage

• your interest only mortgage term has ended already