Interest Only Mortgages
There are a wide range of different interest only mortgage deals to choose from and some of these are detailed below:
Interest Only Tracker rate mortgages – that have their rates pinned to those that are set by the Bank of England, will have their rates adjusted according to the current financial and economic climate. Many people favour these mortgages as their rates cannot be influenced by the lender.
Interest Only Fixed rate mortgage – that provide customers with guaranteed interest rates for a set period, offer some considerable security but can also somewhat expensive.
An interest only mortgage will essentially allow you to only repay the interest that is owed each month on your mortgage. However as well as this, your lender may also expect you to put savings into a savings vehicle in order that you can meet the future repayment of capital required on the mortgage redemption date.
These types of mortgage deals are often favoured by first time buyers, as smaller monthly repayments may allow them to budget their costs more easily. For example, without having to repay the initial loan each month, customers can be free to purchase essentials for their new home.
For independent mortgage advice on interest only mortgage options complete our mortgage enquiry form or call us on 0117 332 6063
While they can be useful, it is important to remember that interest only mortgage deals are not without their disadvantages. Compared with repayment mortgages, these deals are often more expensive in the long run, as interest repayments will remain the same for the duration of the agreement.
Before you choose your method of repayment, you should make a comparison of the mortgage market in order to find the best possible deal. Take a look at our comparison tables to determine what type of mortgage is the right one for you:
While there may be good reasons for operating a mortgage in this way, it is important that money is put aside to pay off the loan at the end of the term.
It is important to get mortgage advice in this area to ensure that an interest-only mortgage is right for your circumstances.
Require mortgage advice? You can call our mortgage team on:
0117 332 6063
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