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Interest Only Mortgages Free Help and Advice
Interest Only Mortgages provide a cheaper option of getting onto the property ladder than conventional repayment mortgages because mortgage payments are lower because only the interest element is being repaid. This can reduce mortgage repayments substantially. However, borrowers should be aware that because only the interest is repaid with an Interest Only Mortgage, the entire capital sum borrowed will still need to be repaid at the end of the life of the mortgage.
As a general rule, an Interest Only Mortgage should only be taken out in conjunction with the likes of a with-profits endowment policy to enable the capital sum borrowed to be repaid at the end of the term. |
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Why Interest Only Mortgages?
Because there is no capital repayment element in an Interest Only Mortgage, a borrower's mortgage repayments will naturally be lower. This can work in favour of the likes of a first time buyer with a limited income, enabling them to get onto the property ladder with initially lower outgoings. However, an Interest Only Mortgage should not ideally be taken out without a repayment vehicle such as an endowment or an ISA.
Interest Only Mortgages Advice
The best advice for anyone seeking an Interest Only Mortgage is to seek professional help from a professional mortgage broker or advisor.
In Summary
In summary, Interest Only Mortgages offering a lower payment structure than capital repayment mortgages. However, while they may be helpful to the likes of the first time buyer enabling them to get onto the property market, they are not a long-term mortgage solution and should also be taken out with a repayment vehicle such as an endowment mortgage or an ISA.
