Award-Winning Bad Credit Specialist · FCA No. 301173
Interest Only Mortgage With Bad Credit Options Explained
Darryl Dhoffer
CeMAP · CeRER · FCA 301173 · ⭐ 52 Reviews
"I specialise in exactly this. Free assessment — no credit search, no obligation. I respond within 2 hours."
Interest only mortgages with bad credit are available through specialist lenders in specific circumstances. Darryl Dhoffer explains exactly when they work and what is required.
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Award-Winning
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FCA No. 301173
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Interest Only Mortgages and Bad Credit
Quick answer — Can I get an interest only mortgage with bad credit? Yes but options are more limited than for repayment mortgages. Interest only is more commonly available for buy-to-let properties where rental income services the interest. For residential interest only mortgages with bad credit you typically need significant equity or assets as a repayment strategy. Darryl will assess whether interest only is viable for your specific situation.
An interest only mortgage means you only pay the interest each month and not the capital. At the end of the mortgage term you repay the full loan amount. With bad credit interest only mortgages are available primarily for buy-to-let properties and in some residential cases through specialist lenders.
The key requirement beyond the credit profile is a credible repayment strategy for the capital at the end of the term. Lenders must satisfy themselves that you have a realistic plan to repay the loan.
Darryl Dhoffer — The Mortgage Geezer
20+ years in financial services. Award-winning specialist. Featured in the Daily Express, FT Adviser, The Intermediary and Daily Mirror. I have helped hundreds of people across the UK who were told no by their bank — and I work with 65+ lenders including specialist adverse credit lenders you will not find on comparison sites.
When you contact me, you speak to me directly. No call centres. No being passed around. I personally review every case and respond within 2 hours.
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Frequently Asked Questions
Can I get an interest only mortgage with bad credit? ›
Yes but options are more limited than for repayment mortgages. Interest only is more commonly available for buy-to-let properties where rental income services the interest. For residential interest only mortgages with bad credit you typically need significant equity or assets as a repayment strategy. Darryl will assess whether interest only is viable for your specific situation.
What repayment strategies do lenders accept for interest only? ›
Accepted repayment strategies typically include sale of the property endowment policy ISA or investment portfolio pension lump sum and sale of other assets. The lender must be satisfied the strategy is credible and realistic. Darryl will advise which strategies are accepted by the specialist lenders most likely to approve your application.
Is interest only available for bad credit buy-to-let? ›
Yes. Most buy-to-let mortgages including those for adverse credit applicants are available on interest only terms. The rental income covers the monthly interest payments and the property is sold at the end of the term to repay the capital. Darryl regularly arranges interest only BTL mortgages for adverse credit landlords.
What LTV is available for interest only mortgages with bad credit? ›
Most specialist lenders cap interest only mortgages at 70-75% LTV for bad credit applicants. This means you need at least 25-30% deposit or equity. The lower the LTV the more lenders will consider your application and the better the rate.
What is a retirement interest only mortgage? ›
A Retirement Interest Only or RIO mortgage is designed for older borrowers typically 55+. You pay the interest monthly and the loan is repaid when you sell the property move into care or die. RIO mortgages have no fixed end term which makes them accessible for older adverse credit borrowers. Darryl is CeRER qualified and can advise on RIO suitability.
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FCA No. 301173
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Lender criteria, rates and deposit requirements quoted on this page are indicative and subject to change without notice. Individual circumstances vary. This page provides general information only and does not constitute regulated financial advice. The Mortgage Geezer is a trading style of Access Financial Services Ltd who are authorised and regulated by the Financial Conduct Authority. The Financial Services Register number is 301173. Registered in England No. 04427489. Registered office address Access Financial Services Ltd, Unit 1 Furtho Court, Towcester Road, Old Stratford, Milton Keynes, MK19 6AN. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP YOUR REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER LOAN SECURED AGAINST IT.