Definitions for "Interest Only"
A loan for which only payments of interest are paid to the lender during the term of the loan i.e. the original loan is still owed at the end of the mortgage term. All mortgages other than capital and interest repayment loans are a form of interest only loan. Interest only loans often linked to Pensions, endowments, ISA's etc. Some lenders will allow loans to be set up without any specific provision to repay the capital at the end of the period this is more commonly known as a 'pure interest only' loan.
The client only pays interest on the mortgage, at the end of the mortgage term they will still owe the full amount originally borrowed.
Mortgages where you pay off the interest only.