With an interest-only mortgage you pay back only the interest on the amount that you have borrowed.
Therefore, at the end of the mortgage term the full original balance of your mortgage remains oustanding. As a result, in order to keep your property, you must fund the full balance of the mortgage from somewhere else: for example from a savings vehicle, a pension, or from the sale of other assets, which could include your home.
Following the recent financial and banking crisis, interest-only mortgages have become less and less commmon, to the point where many major lenders don’t offer them at all, in any circumstances. We find it hard to conceive of a situation, in the current economic climate, where a professional mortgage adviser would recommend an interest-only mortgage to a client, other than on a buy-to-let basis.