Interest Only Mortgages

Posted on 18 January 2011 by Douglas Alston


Interest Only MortgagesI want an interest only mortgage borrowing less than 50%. I don't want a repayment vehicle as I am 55. I own another property free of bond.  Are these available?

Douglas,

It is most certainly possible to obtain an interest only mortgage, but you will need to tell the Lender how you intend to repay the loan. There are some Lenders who will accept the sale of the property as a repayment vehicle or the sale of a second property, so it would not be necessary for you to start a specific investment for this purpose.

Most Lenders will only grant you a mortgage to the age of 75 and will want to know how you intend to pay back the debt at the end. They and any mortgage adviser involved in arranging the mortgage have a duty of care to ensure that you have the means to do this and are not left in a position of being made homeless 20 years or so down the line.

If you are in any doubt about this or which Lenders to approach I recommend that you speak to an independent mortgage broker about your circumstances.

Peter

Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.