Find out what we can do to help you with your finances. Get in touch with us today!
Interest-only mortgages have been in the press a great deal over the last few years and it has now become very difficult to get one on a normal residential mortgage. However, with buy to let mortgages they are still widely available.
With an interest only mortgage the loan amount remains the same for the term of the loan you just pay the interest on a monthly basis. At the end of the term the outstanding balance must be repaid.
As an example if you purchased a £200,000 property using an interest only mortgage of £150,000 you would make monthly payments comprising of just the interest and then at the end of the term you will be required to pay off the £150,000.
But is it right for you?
You must have a plan in place that will enable you to have sufficient funds to repay the loan. This may be by selling the property at the end of the term or you may have other investments that could be cashed in to give you enough funds.
If house prices fall there is a higher risk of negative equity than with a traditional repayment mortgage.
To discuss interest only mortgages call us on 01444 443439.