| There are currently around 6 million homeowners who | | | | Ideally those taking out this type of mortgage should |
| have an interest only mortgage. This type of product | | | | have some form of investment that they are able to |
| means that the monthly repayments that you make | | | | fall back on and so use it to repay the capital of the |
| are just taken off the amount of interest that the | | | | loan. While the interest only mortgage does give the |
| mortgage accumulates. The capital which you | | | | cheapest rates of interest over the long term it is one |
| borrowed must be paid back when the mortgage has | | | | of the dearest types of mortgage. |
| run its terms.an | | | | If you want to be sure that you can own your home |
| This type of product seems to be very popular with | | | | at the end of the mortgage arrangement then you |
| those who are house buying for the first time. Recent | | | | have to have a repayment vehicle, unless of course |
| research showed that the amount of first time buyers | | | | you already have the means by way of an ISA. This |
| taking out interest only rose to 18%. This product could | | | | means that part of the monthly repayment goes |
| be popular because the rates of interest are usually a | | | | towards the interest and the other part towards the |
| lot lower than a repayment mortgage. Due to this it is | | | | capitol. If you have an interest only mortgage then you |
| the only type of mortgage that many starting out first | | | | should consider changing a part of it to a repayment |
| time in buying can afford. | | | | option or start saving money in an ISA account. |
| However while low rates are a good thing, the down | | | | If you want to check out the costs of borrowing that |
| side is that when the term of the mortgage comes to | | | | come with interest only offerings then go with a |
| an end you will still owe the same amount of money | | | | specialist website. You can get several quotes |
| that you started out owing. If you do not have a | | | | together on one page which makes comparing quotes |
| means of paying this then of course you would have | | | | easy and quick. You also have to take into account |
| to take out another loan. | | | | the small print of any loan you are considering as this is |
| Lenders have perhaps become a little lax with this | | | | where you can find the added costs. |
| type of product because years ago you would have | | | | Costs such as set up fees can vary widely from |
| to be able to prove to them that you had means of | | | | lender to lender so it is worthwhile choosing a |
| repaying the capital at the end of the mortgage. | | | | mortgage with low costs or costs that have been |
| Today you can take out an interest only mortgage | | | | wavered. The small print can include valuation fees |
| and having to find the capital is only mentioned on the | | | | and a lump sum payment if you should want to switch |
| bottom of the mortgage agreement. | | | | within a certain time frame of taking out the mortgage. |