Not all mortgage lenders may offer interest only mortgages: Due to each lender having strict eligibility criteria for an interest only mortgage, you may not have as many products or lenders available to you compared to taking the mortgage on a repayment basis, especially if you are a first time buyer. 

Your mortgage balance will not reduce: As your monthly payment is simply covering the interest cost each month, your mortgage balance does not reduce unless you make overpayments into your mortgage. At the end of the mortgage term you will still owe the bank the original amount you borrowed (minus any overpayments you have made). You need to ensure you a clear and adequate repayment vehicle to ensure the mortgage debt is cleared in full at the end of the mortgage term.

Higher overall costs: As the mortgage debt is not reducing each month, you will pay more interest overall during the mortgage term. This is because you’re paying interest on the full amount you originally borrowed every month. 

Yes, this is very important. Lenders will need to verify your repayment vehicle as part of your application to ensure they are comfortable that you will adequate funds available to repay the interest only mortgage debt in full at the end of your mortgage term.

Repayment vehicles that lenders typically accept are a lump sum from your pension, cash savings or investments, the sale of another property you may own, or the sale of your main residence and downsizing before you reach retirement (or a combination of these). Banks will request proof of your repayment strategy as part of your application and they will require this before they able to issue your mortgage offer. 

This does vary across the market. Some banks do have specific interest only mortgage products, whilst other lenders offer the same products regardless of whether you apply for an interest only or capital and repayment mortgage.