Property Investment Mortgages on an Interest-Only Basis

Mortgages for property investment are varied and diverse, making purchasing a range of rental or development assets possible. Here we look at the possibility of an interest-only investment mortgage and the key facts to bear in mind.

Property Investment Mortgages on an Interest-Only Basis

Property remains a stable investment strategy, and interest-only borrowing can be the most cost-effective way to streamline cash flows and realise an efficient return on your investment.

The Revolution team has created this guide to explain how interest-only lending can support property investments, but for more tailored advice, give us a call on 0330 304 3040 or drop an email to

How Do Investment Mortgages Work?

Investment mortgages are designed for landlords, or property investors, who are either buying a property as a rental or intend to resell the property to make a profit.

Are Interest-Only Investment Mortgages a Specialist Product?

They are - and there are apparent differences from typical residential lending.

Repayment mortgages entail a monthly repayment, with a portion of the original capital value borrowed, and an interest element.

Interest-only mortgages mean paying a smaller monthly amount, solely of the interest, without repaying any of the original loan value.

This works well in investment scenarios, given that the property can be sold at the end of the term, with the equity retained as the return on investment.

What Types of Investment Mortgage Can I Choose Between?

UK lenders offer a range of interest-only borrowing products, such as:

  • Commercial and semi-commercial lending for businesses.
  • HMO mortgages for investment properties with multiple residences.
  • Holiday let mortgages.
  • Interest-only buy to let mortgages for landlords.

Commercial Mortgages - designed for businesses, from sole traders to large organisations. Semi-commercial means that the property has an element of residential, as well as commercial, space - such as a shop with a flat above it.

HMO Mortgages - HMO stands for 'house of multiple occupants', and usually means at least three people share the property, and not as a single-family unit. If the property accommodates five or more people, it is classed as a large HMO. Interest-only HMO lending is a specialist product.

Holiday Let Mortgages - created for investors either buying a UK or overseas property to let out on a short-term basis.

Buy to Let Mortgages - offered to landlords, with the affordability assessed against the anticipated rental income.

How Do I Know if I am Eligible for an Interest-Only Investment Mortgage?

Investment mortgages look most closely at the income from the investment, as well as your income levels in some cases.

Mainstream lenders often require a minimum £25,000 personal income, although niche interest-only lenders may not have any minimum in place.

The most important eligibility criteria are:

  • Loan to Value Ratio - caps are usually around 75% to 80% of the property value, with some niche lenders going as high as 85%.
  • The anticipated rental or investment income and how this will cover the repayment of the lending.
  • What repayment plan you have, and how reliable and stable the exit strategy is.

HMO Mortgages - eligibility criteria are relatively strict for interest-only lending, which will consider how many residents the property can accommodate, local licensing, and your landlord experience.

Holiday Let Mortgages - this interest-only lending will look at all the above criteria, as well as the location of the property.

Commercial Mortgages - business lending usually requires an experienced broker. Deposits tend to be higher, and the terms depend on the business circumstances and lending scenario.

Buy to Let Mortgages - lenders will look at how much the property is worth, how you expect to repay the balance, and what the likely rental income will be from the investment. Most lenders will need to see a minimum cover - for example; the rental income needs to be at least 125% of the monthly interest-only payments.

Expert Advice on UK Investment Mortgages

For individual advice, and independent recommendations, contact mortgage brokers on 0330 304 3040 or via email at

With a vast array of lenders, interest-only products, and eligibility criteria, we ensure you apply to the right lenders to secure the most advantageous deals on the interest-only lending market.

Why Revolution Brokers?
  • Whole of market brokers

  • Mortgage that suits you

  • On time customer support

Latest Blogs

11 Mar 2022
Guide to Remortgaging to Finance a Home Renovation

Remortgaging your home is a great way to release equity and raise finance for those home improvement jobs you've always wanted to do. Before applying, it's vital to work out how much equity you have in your property and ensure sufficient capacity to borrow the funds required for the renovation you have in mind. In today's article, t..

10 Feb 2022
Do I Qualify for First-Time Buyer Status?

Do I Qualify for First-Time Buyer Status? Working out whether or not you are a first time buyer may seem obvious - but there are plenty of scenarios where your position isn't clear! Examples might include: New buyers who have inherited a property they rent out. Buy-to-let investors that have never purchased a residential hom..

26 Jan 2022
How Does a Remortgage Application Work?

Most homeowners know that remortgaging means switching a mortgage from an existing lender over to a new deal. However, the process isn't always obvious. If you're on a fixed-rate deal, you'll want to get ahead of the end of the term to avoid being shuffled onto a higher standard variable rate where your interest costs will undoubtedly ..

17 Dec 2021
Understanding Lender Risk on First-Time Buyer Mortgages

Finding a great mortgage as a first time buyer can feel like an uphill struggle, with a larger proportion of applicants being turned down than a year ago. Around 20% of first-time mortgage applicants are rejected, usually because of the lender risk associated with their loan. Today, Revolution Brokers explains the highest risk facto..

28 Oct 2021
Pros and Cons of First Time Buyer Buy to Let Mortgages

Investing in a rental property can be an excellent way to get onto the property ladder and earn an income. However, if you haven't owned a residence before, you might find that a mainstream bank will automatically turn you down for a buy to let mortgage. In today's guide, the Revolution Brokers team explains how you can become a ren..

12 Oct 2021
Mortgage Deposit Requirements for First-Time Buyers

Buying a home for the first time is a massive step - but the deposit is often a stumbling block for first-time buyers. It can take years to save a sufficient amount or be impossible, so there are several ways to approach the problem and get your foot onto the property ladder. From April 2021, the UK government launched the new mortg..


Refer, Relax and get £50

If you refer a friend for a mortgage or any
type of finance you’ll both receive £25
each when their new application
successfully completes.

Know More!

We are proud
members of the:

FCA disclaimer

The content included in our articles, blogs, web pages and news publications is based on information accurate at the time of writing. Note that policies and criteria can change regularly throughout the UK mortgage lending market, and it remains essential to contact the consultation team to receive up to date guidance. The information included on the Revolution Brokers site is not bespoke to any circumstances or individual application scenarios and therefore is not intended to be used as financial advice. The content we share is designed to be informative and helpful but cannot be relied upon to provide individual advice relevant to your mortgage requirements. All Revolution team members are fully qualified, trained and experienced to provide mortgage advice of an independent nature. We collaborate with lenders and providers who are regulated, authorised and registered with the Financial Conduct Authority (FCA). Should you require specific mortgage borrowing types, some products such as buy to let mortgages may not be FCA regulated. The Revolution team can provide further information about regulated and unregulated lending as required. Please remember that a mortgage is a debt which is secured against your home or property. Your home can be at risk of repossession if you do not keep up with the repayments or encounter any other difficulties in managing your mortgage borrowing responsibly. This also applies to any remortgage or home loan secured against your property, including equity release products.

Ask the Mortgage Experts

Revolution Brokers understands that mortgages can be complex and confusing!

Ask us any question you might have, and one of our skilled consultants will come back to you as quickly as possible.