Compare Interest Only Mortgages for First Time Buyers
Finding an appropriate mortgage can often seem like a difficult and confusing task, especially for first time buyers. Interest only mortgages are quite different from repayment mortgages, and may be more suitable for some first time buyers in the right circumstances. In any case, it is important to conduct as much research as possible when comparing mortgage deals.
As is the case with any other type of mortgage agreement, customers will be expected to make monthly repayments over the course of an agreed period. However, the borrower will only be expected to repay the interest on their on loan initially, which can make their monthly payments considerably easier.
For first time buyers, an interest only mortgage may offer a number of benefits, the following are some examples:
- First time buyers who have less money may find it easier to make their monthly repayments
- They may have more money available to spend on furnishing or renovating the property
- An interest only mortgage may be more flexible, allowing customers to under or overpay on their payments depending on the state of their finances
- Borrowers may also find a higher degree of competition on the market when searching for a deal, giving them more freedom to choose a suitable deal
Although interest only mortgage may be highly useful for first time buyers, it should be remembered that they are not without their drawbacks.
Over a long term period once the interest has been completely rapid (over a 20 year period for example) interest only mortgage holders will generally pay significantly more than people with a repayment mortgage. Also, unlike a repayment mortgage, the borrower may not always be guaranteed to own the property completely, as they must have set aside enough money over a number of years using an investment vehicle.
If you are a first time buyer searching for a suitable interest only mortgage, feel free to look at our mortgage comparisons table for more information on the various mortgage deals that are available.