With an interest only re-mortgage the initial loan amount remains constant throughout the term of the loan. The monthly mortgage repayments only pay off the interest being charged on this amount. Interest only mortgages are tied to investments such as ISAs, endowment policies and personal pensions which are designed (not guaranteed) to cover the initial loan amount at the end of the loan term.
With this method the initial loan amount remains the same throughout the term of the loan, while the monthly mortgage repayments only pay off the interest being charged on this amount. For this reason, Interest Only mortgages are tied to investment in one of a number of different repayment vehicles, which, ideally, should cover the initial loan amount at the end of the loan term. These repayment vehicles include endowment policies, personal pensions, ISAs etc.