Frequently asked questions

Use our frequently asked questions to find out what you need to know about Interest Only mortgages with Lloyds Bank International.

  • 1.
    How does an interest only mortgage work?

    When you have an interest only mortgage, your monthly payments only pay the interest charged on the amount you borrowed. This means the interest only balance doesn’t reduce and you’ll need to have separate plans to pay this amount by the time your mortgage ends.

    For example, if you borrowed £125,000 with an interest rate of 3% over 25 years, we’ll set your monthly mortgage payments at £313. By the end of your mortgage, you’ll still need to repay the £125,000 you originally borrowed.

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  • 2.
    What’s the difference between an interest only and a repayment mortgage?

     

    Interest Only Mortgage Repayment Mortgage
    Your monthly payments will only repay the interest charged on the amount you borrowed. This means that you won’t be paying off the amount originally borrowed. Your monthly payments will go towards reducing the amount you borrowed and the interest charged on this amount. This means that each month you are paying off a small part of what you borrowed.
    You’ll need a separate plan in place to repay your interest only balance by the end of your mortgage. Your monthly payments are set to repay everything you owe by the end of your mortgage.


    Your mortgage can also be a combination of repayment and interest only. This way, some of your monthly payments will also go towards reducing the balance.

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  • 3.
    What is a mortgage repayment plan?

    By the end of the mortgage, you’ll need to repay the full interest only balance. There are many different plans you can put in place to repay the balance and we’ve listed some of these below. When considering your options, you should make sure that your plan will provide enough to repay the balance and importantly, be available when you need to make the final payment.

    Repayment plans Things to consider
    Switch to a repayment mortgage Switching all, or some of your mortgage to a repayment mortgage means you’ll start paying off the amount you borrowed, as well as the interest. If you switch your whole mortgage to repayment, we’ll set your monthly payment to repay everything you owe by the end of your mortgage term. If you switch part of your mortgage, you’ll reduce the amount you’ll need to repay by the end. 

    To switch to repayment, please contact us. We’ll look at your income and how much you spend each month to understand if this is an affordable option for you.
    Overpayments When you make overpayments to your mortgage, you’ll reduce the amount you owe and pay less interest. The sooner you start making overpayments, the sooner you’ll start reducing the interest only balance.

    Early repayment charges may apply to your mortgage. Please check if you’re unsure if these apply.
    Sale of your  second property House prices change regularly and may fall as well as rise. It’s important to be realistic about the value of your property and to allow enough time to complete the sale before your mortgage ends.
    Savings You should check your statements when you receive them to make sure you’ll have enough and can get access to the money when you need it.
    Investments The value of any investment can change over time, falling as well as rising. You should check your statements when you receive them to make sure you’ll have enough and can get access to the money when you need it.
    Pension Using the lump-sum from your pension policy to repay some, or all, of your mortgage at the end of the term will impact the income you’ll have when you retire. If you’re unsure how this will affect your retirement income, you should speak to an independent financial advisor.
    Sale of a business or other assets The value of any business or assets you plan to sell can go down as well as up.  If you don’t get the amount you expect when you sell, it may affect your ability to repay.  It may take a while to sell your assets so you’ll need to plan for this in good time before your mortgage term ends.
    Bonus Changes in any bonus you expect to receive may affect your ability to repay your mortgage. 
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  • 4.
    What do I need to do before my mortgage term ends?

    We’ll write to you during the last year of your mortgage, with details of how much your interest only balance is and when it’s due to be repaid.

    You should check your repayment plan is on track to repay everything you owe and also that you can get access to the money when you need it. If you’re planning to sell a property, business or other assets, you should allow enough time for the sale to complete and the money to become available.

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  • 5.
    I can repay the interest only balance, do I need to do anything?

    If you're confident your plans are on track to repay everything you owe, let us know. You can discuss your plans by calling us on 01624 657500.

    Our lines are open 9am to 5pm Monday - Friday UK time.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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  • 6.
    My plans have changed, what do I need to do?

    If your plans change, but you’re still happy you can repay everything you owe that’s great. Please let us know and keep us updated, you can discuss your plans by calling us on 01624 657500.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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  • 7.
    I’m worried that my savings, or investments might not be enough to repay all of my mortgage.

    It’s important to be realistic about the value of your savings, or investments. You can check your savings, and investments statements to make sure you have enough to repay your balance when your mortgage term ends. It’s best to talk to us as soon as you can if you are worried your plans might not be enough to repay your mortgage.

    You can call us on 01624 657500. Our lines are open 9am to 5pm Monday - Friday UK time.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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  • 8.
    I'm approaching, or already past, the end of my mortgage term. What do i do if i don't have any plans or i'm worried my plans won't be enough to repay what I owe?

    If you think you may struggle to repay your full interest-only balance, let us know as soon as possible. You could be a few years from the end of your mortgage term, maybe just a few months, or even already past the end of your term. However long you have left, the sooner you get in touch, the more solutions you may have.  

    Every day we help customers make plans. We can help you decide what works best for you. Check what information is available to you online or you can call us on 01624 657500. Our lines are open 9am to 5pm Monday - Friday UK time.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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  • 9.
    I’m using the sale of my property to repay my outstanding mortgage balance. When should I look to sell the property?

    If you are using the sale of a property to repay your mortgage, you should give yourself enough time to market and sell the property before the term ends. You may need at least 12 months to market your property to allow time for the sale to go through.

    House prices change regularly and may fall as well as rise. It’s important to be realistic about the value of your property, make sure you are prepared and understand what your next steps will be after you have sold your property.

    You can call us on 01624 657500. Our lines are open 9am to 5pm Monday - Friday UK time.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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  • 10.
    Where can I find independent help and advice about my mortgage?

    We’re always here to talk to you about your finances, but there are other people you can talk to for independent help and advice. Here are some services that offer free, impartial support:

    If you have any questions about your mortgage which aren’t covered above, please call us 01624 657500. Our lines are open 9am to 5pm Monday - Friday UK time.

    Calls may be monitored and recorded. Call costs may vary depending on your service provider.

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The Bank conducts its business in accordance with local legal and regulatory requirements, including anti-money laundering requirements which require the Bank to disclose information that would otherwise be confidential in circumstances where the Bank suspects its customer is benefiting or engaging in criminal activity including tax fraud.

Lending is at the Bank’s discretion and you must be 18 or over to apply. Security may be required. 


Important legal information

Lloyds Bank Corporate Markets plc is authorised and regulated in the UK as the non-ring fenced bank of the Lloyds Banking Group. The Jersey, Guernsey and Isle of Man branches of Lloyds Bank Corporate Markets plc are each separately licensed as regulated deposit-takers in their respective jurisdictions. Lloyds Bank Corporate Markets plc is independent from Lloyds Bank plc, which is authorised and regulated in the UK as the ring fenced bank of the Lloyds Banking Group. For more information on ring-fencing visit international.lloydsbank.com/ringfencing/.

Our International services are offered by Lloyds Bank Corporate Markets plc. See Company Information. Whilst our services will be available to many customers, there are countries where, due to legal or regulatory restraints, we cannot provide them.

Rules and regulations made under the UK Financial Services and Markets Act 2000 for the protection of depositors and investors, including the Financial Services Compensation Scheme, do not apply to the financial services business of companies within the Lloyds Banking Group carried out from offices outside of the United Kingdom.

Lloyds Bank Corporate Markets plc. Registered Office and principal place of business: 25 Gresham Street, London, EC2V 7HN. Registered in England and Wales no. 10399850 with company number 10399850. Lloyds Bank Corporate Markets plc in the UK is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority under registration number 763256. Authorisation can be checked on the Financial Services Register.

Services provided by the Jersey, Guernsey and Isle of Man branches of Lloyds Bank Corporate Markets plc will be subject to the regulatory regime applicable in their respective jurisdiction, which will differ in some or all respects from that of the UK.

Further information about the regulatory status of the Jersey, Guernsey and Isle of Man branches of Lloyds Bank Corporate Markets plc, is set out below.

The Jersey branch of Lloyds Bank Corporate Markets plc, principal place of business 9 Broad Street, St Helier, Jersey, JE2 3RR, is regulated by the Jersey Financial Services Commission to carry on deposit-taking business under the Banking Business (Jersey) Law 1991 and general insurance mediation business under the Financial Services (Jersey) Law 1998 and has also notified the Jersey Financial Services Commission that it carries on money service business. Lloyds Bank Corporate Markets plc, Jersey Branch, subscribes to the Jersey Code of Practice for Consumer Lending.

The Guernsey branch of Lloyds Bank Corporate Markets plc, principal place of business 1 Smith Street, St Peter Port, Guernsey GY1 2JN, is licensed by the Guernsey Financial Services Commission to take deposits and insurance intermediary business under the Banking Supervision (Bailiwick of Guernsey) Law 2020, and the Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002 (as amended), respectively, and is also registered with the Guernsey Financial Services Commission as a money service provider.

The Isle of Man branch of Lloyds Bank Corporate Markets plc, principal place of business Villiers House, 2 Victoria Street, Douglas, Isle of Man, IM1 2LN, is licensed by the Isle of Man Financial Services Authority to conduct deposit-taking and is also registered as an insurance intermediary in respect of general business.

Lloyds Bank International is the registered business name of Lloyds Bank Corporate Markets plc in Jersey and the Isle of Man.

Lloyds Banking Group plc does not guarantee the liabilities of its subsidiaries. The paid up capital and reserves of Lloyds Banking Group plc was £53.152 billion as at 31 December 2021. Rules and regulations made under the UK Financial Services and Markets Act 2000, including the Financial Services Compensation Scheme, do not apply to the financial services business of companies within the Lloyds Banking Group carried out from offices outside the United Kingdom. 

The paid up share capital and reserves of Lloyds Bank Corporate Markets plc was £3.489 billion as at 31 December 2021. Copies of our terms and conditions and latest report and accounts are available upon request from the above registered office.  

Lloyds Bank International is the registered business name for Lloyds Bank Corporate Markets plc in Jersey and is a participant in the Jersey Bank Depositors Compensation Scheme. The Scheme offers protection for eligible deposits of up to £50,000. Eligible deposits are deposits held by private individuals and charities. Depositor protection does not extend to corporations, small to medium sized enterprises, partnerships and trusts. The maximum total amount of compensation is capped at £100,000,000 in any 5 year period. Full details of the Scheme and banking groups covered are available on the States of Jersey website or on request.

The Isle of Man branch of Lloyds Bank Corporate Markets plc is a participant in the Isle of Man Depositors’ Compensation Scheme as set out in the Depositors’ Compensation Scheme Regulations 2010, as amended (the “Isle of Man Scheme”). The Isle of Man Scheme offers protection for ‘eligible protected deposits’ of up to £50,000 (which includes deposits by most individual persons but does not, for example, include trustees or nominees) or £20,000 for most other categories of depositor, subject to certain rules and limitations set out in the  Isle  of  Man  Scheme. 

Further details of the Isle of Man Scheme are available on the Isle of Man Financial Services Authority’s website and on request.

The Guernsey branch of Lloyds Bank Corporate Markets plc is a participant in the Guernsey Banking Deposit Compensation Scheme. The Scheme offers protection for 'qualifying deposits' up to £ 50,000, subject to certain limitations. The maximum total amount of compensation is capped at £ 100,000,000 in any 5 year period.

Full details are available on the Scheme’s website or on request from telephone: +44 (0) 1481 722756 or post: P.O. Box 33, Dorey Court, Admiral Park, St Peter Port, Guernsey GY1 4AT. Deposits are not covered by the Financial Services Compensation Scheme under the Financial Services and Markets Act 2000 in the United Kingdom.  

Deposits with the Guernsey branch of Lloyds Bank Corporate Markets plc will not be covered by any equivalent deposit compensation scheme to the Guernsey Banking Deposit Compensation Scheme in any other jurisdiction.

Complaints involving the Isle of Man branch of Lloyds Bank Corporate Markets plc that it cannot settle should be referred to the Financial Services Ombudsman Scheme in the Isle of Man. Complaints involving the Jersey and Guernsey branches of Lloyds Bank Corporate Markets plc that it cannot settle should be referred to the Channel Islands Financial Ombudsman.

View our information on how to complain.

Please note that, in relation to banking services which we provide, you might not be eligible for compensation under a deposit protection guarantee scheme available in your country of residence. If in doubt, contact your local banking regulator, visit their website or seek independent advice.

Lloyds Bank Corporate Markets plc is incorporated in England and Wales with company number 10399850 and is authorised by the Prudential Regulation Authority (PRA), registration number 763256 and regulated by the Financial Conduct Authority (FCA)and the Prudential Regulation Authority. The Jersey, Isle of Man and Guernsey branches of Lloyds Bank Corporate Markets plc are licensed by the Jersey Financial Services Commission, the Isle of Man Financial Services Authority and the Guernsey Financial Services Commission respectively. Lloyds Bank Corporate Markets plc is a wholly owned subsidiary of Lloyds Banking Group plc.

The Jersey, Isle of Man and Guernsey branches of Lloyds Bank Corporate Markets plc place funds with Lloyds Bank Corporate Markets plc and thus their financial standing is linked to that of Lloyds Banking Group.

Depositors may wish to form their own view on the financial standing of Lloyds Bank Corporate Markets plc and their parent company based upon publicly available information.

Legislation or regulations in your home jurisdiction may prohibit you from entering into such a transaction with us. We reserve the right to make final determination on whether you are eligible for any products or services. Residents or Nationals of certain jurisdictions may be subject to exchange controls and should seek independent advice before entering into any transactions with us.