Interest Only Mortgages

With an interest-only mortgage – as the name suggests – the monthly mortgage repayment involves only the interest part of the debt.

The main advantage of an interest-only mortgage is that the monthly repayments will be considerably lower than they would be with a traditional repayment mortgage.  The main drawback is that at the end of the mortgage term, you will still owe the original amount that you borrowed.  Therefore, if you do choose an interest-only mortgage, you will need to arrange your own method of repaying the capital debt.  If you are certain of a sizeable inheritance or windfall, then this option may appeal.  Alternatively, you may wish to save as you go along and there are several ways of doing this.  The most popular method is through an ISA.  You also have the option of endowments or pension plans, but these do not come without risk.

For more interest only mortgage advice, please contact your PK Group Advisor for a free, no-obligation discussion.  Or, if you are a new customer, please do get in touch and one of our property finance specialists will be happy to assist.