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"The Easy Way to Get Your Best UK Mortgage" |
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If you still want to borrow interest-only, ask yourself the following questions first
• Am I clear about the long-term risks and costs of not setting up a repayment vehicle right away?
•
Can I afford to take the same mortgage on a repayment (capital
and interest) basis even if it means cutting back on other
spending for a few years?
Going for repayment is cheaper over the long term because
there's less interest to pay and the capital debt will be
cleared without you having to take on an expensive and risky
investment plan.
•
Could I afford a repayment mortgage if I increased the term
from, say, 25 to 30 years?
This will increase your total interest bill, but at
least it will mean your entire debt is cleared without having
to worry about a repayment vehicle.
•
If I really can't afford a similar size of repayment loan,
can I find a cheaper, less risky way to keep my costs under
control?
It could be worth buying a slightly cheaper property
if it would enable you to afford a repayment loan. You can
always trade up when your financial situation improves.
•
Do I understand the various types of repayment vehicle and
the costs and risks involved?
Possible repayment methods include investing in a stocks
and shares Isa (individual savings account), saving into
a high interest bank or building society cash Isa or selling
other property.
Most experts agree that saving into an endowment policy
or a pension plan for this purpose is not a good idea.
For more on this, see The
endowment mortgage and The
pension mortgage.
If you are still determined to take an interest-only mortgage, look for one with flexible features, that allows you to make additional one-off payments when you can afford them, to reduce the capital sum.
And make sure you consult an independent financial adviser before settling on a repayment vehicle this is a costly and uncertain, long-term commitment, so it's essential to choose wisely.
Should I choose repayment or interest-only?
How to change from an interest-only to a repayment mortgage.
The true cost of an interest-only mortgage
How to decide if you should get interest only
Are interest only the new endowment mortgages?
Best Buy Tables for Interest Only Mortgages UK
Frequently asked / common questions about interest-only mortgages
Read our complete guide to interest only mortgages
What went wrong with endowment mortgages?
What should I do with my endowment mortgage?
How to make up an endowment shortfall
Was I mis-sold my endowment mortgage?
How to complain about an endowment
Endowment mortgage claims: a legal loophole
Can I claim endowment compensation?
Am I too late for endowment compensation?
Help making a complaint about your endowment mortgage
Fixed
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Guide to Buying Home in the UK
Guide to UK Home and Mortgage Insurance
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The
two major varieties:
Repayment
mortgages
Interest
only mortgages
Then
mix in the various:
Interest
repayment arrangements
Finally,
to cover all the different types there's a
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