The interest-only mortgage differs from other mortgage types in that you do not make repayments during the term. You pay only interest monthly on the outstanding mortgage amount. This results in low monthly costs, which can be attractive for people with fluctuating incomes or who consciously choose to maximize their financial flexibility.
At the end of the term – often after 30 years – you must repay the full mortgage amount. This can be done, for example, by selling the property or using your own funds. It is therefore important to think about the repayment in a timely manner so that you are not caught off guard.
Note: for mortgages taken out after 2013, the interest on the interest-only portion is not tax-deductible. For mortgages taken out before 2013, you may still qualify for mortgage interest deduction, depending on your situation.
Key Features
- Monthly costs consist only of interest, no repayment
- Low monthly costs, but full repayment at the end
- No mortgage interest deduction for new mortgages
- Risk: no asset accumulation during the term
- Suitable for people with capital or a clear repayment strategy
This type of mortgage requires a solid financial plan. Our advisors are happy to help you gain insight into the opportunities and risks of an interest-only mortgage.