Interest only mortgages explained
Repaying only the interest over the term of the mortgage
An interest only mortgage is where the borrower is required to make regular interest payments over the term of the
mortgage. At the end of the mortgage term the priniple, or the amount originally borrowed, will become payable. So,
to put another way, you never actually repay any of the loan.
Your monthly payments will be lower than a repayment mortage. But, unlike a repayment
mortgage, at the end of the term the loan is still outstanding and becomes payable.
This arrangement may suit some borrowers, but for many other arrangments have to be made with regard to repaying the actual
loan. This can be done using a repayment vehicle that will run along side the mortgage. It is important you seek
financial advice when considering interest only mortgages.
YOUR HOME MAYBE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE