How is the interest calculated on a Buy to Let interest only mortgage?

Posted on 15 September 2007

On a buy to let interest only mortgage, how is the interest calculated?

Hi,

It's literally the interest rate multiplied by the loan amount each year, divided by twelve to give a monthly amount. Eg:

6% interest rate on £150,000 loan =
6% x £150,000 = £9000 interest charged each year
£9000 / 12 = £750 per month

Katie

Category: Buy-to-let, Lower mortgage payments

 

Answers provided in response to Ask Bea are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of Charcol Limited. All comments are made in good faith, and neither Charcol Limited nor Bea will accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

Question