Why are interest only mortgages so hard to find?
Interest only mortgages do exactly what they say – pay off just the interest. At the end of the mortgage, you need to have a way of paying off the capital loan for the property. If you don’t have this repayment vehicle in place, your home may be repossessed, so there is risk for both borrower and lender.
Given the current low interest rates on savings and investments we are experiencing, lenders have stricter rules around who they will lend to on this basis and many simply won’t support this kind of mortgage any more.
How can John Charcol help with interest only mortgages?
As mortgage experts with years of experience, we have helped numerous clients to get interest only mortgages.
We know the smaller building societies and private banks that maybe prepared to offer interest only mortgages in the right circumstances and we’ll make a personal case for people we think are likely to be successful.
These are just some examples of the circumstances that might enable you to qualify for an interest only mortgage:
- You are looking for a mortgage of 50% of the value of the property and will pay off the capital when you sell the property. This can be more or less than 50% in some circumstances, depending on availability)
- You have a record of bonus-based income that you can use to pay off the capital in lump sums each year
- You have a limited period in mind, for example three years until you finish paying off the school fees, when you will revert to a repayment mortgage
- You are an older client who wishes to stay in a property for a defined period of time, with the value of the property to pay off the capital when you move on
To find out how we can help you to secure an interest only mortgage, call us on 0344 346 3672 or enquire now.