Do you have an interest only mortgage?

At Enable Independent we understand some of the issues behind individuals buying homes with an interest-only mortgage. An interest only mortgage offers a much lower rate of mortgage, as typically they only pay the interest and not the capital amount borrowed.

Mortgage lenders have long dismissed any talk of growing problems facing borrowers with an interest only mortgage, but more and more people who have signed up to these types of mortgages are going to find it harder to pay back the money they have borrowed on their loans, when low performing endowment policies just don’t make up the difference at the end of a mortgage term. 

Interest-only mortgages can offer a solution if they are used efficiently, backed up by  a solid repayment plan. However banks in the past have sold interest only mortgages with people who couldn’t afford to pay it back, and this coupled with the failure of the endowment industry have left many homeowners without enough funds to pay off their home.

There seems to be a looming squeeze on people approaching retirement – this has been caused by a lack of financial planning concerning pension planning and mortgage planning. People who have trusted banks to give them the best advice for their futures, didn’t realise until recently they were only driven by their sales target.

The generation who took equity out on their homes in the boom years, and then spent the money of their lifestyles without properly preparing for their interest only loans to expire. The only saving grace will be that property rises are looking to rise again, so they could have the possibility of down-sizing to pay off their loans.

If you are stuck with a interest-only mortgage and feel as though you would like some independent, plain, honest advice on how to implement a plan to pay off the capital on your home, then why not give one of our independent advisors a call.

Issued by: Enable Independent Financial Life Planners
 25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE.