The Interest Only Mortgage

Interest Only does exactly what it says on the tin. You pay interest on the loan at whatever the current interest rate is and the amount of the loan stays exactly the same. Nothing is paid off the loan. If house prices go up, you own a bigger share of it and if they go down a smaller one, which is not without its dangers.

Interest only mortgages are sometimes used as a way of keeping the costs down during the early years of a mortgage, with the intention of switching to repayment later when salaries increase through normal inflation or promotion, but they can also be used as an alternative form of Equity Release to produce a lump sum to do with as you please. This can be particularly useful when it comes to assessment for Pension Credits;

Entering into an Intererest Only Mortgage Plan has long term implications for both you and your beneficiaries and you should not proceed lightly with any form of releasing cash from the equity in your home, without taking independent financial and legal professional advice. You should also consider

You could well find that the State will effectively foot the bill for you and you should use the link below to check this. However, since the mortgage must remain affordable throughout its term based on your present income, these equity release plans may be restricted for many people to a sum of £30000 or a little more. The Capital is then repaid from the sale proceeds or from the estate on death.

The Mortgage Shop is a retired IFA that no longer gives direct advice on or arranges Equity Release. Instead, it passes your enquiry to a fully qualified and licensed professional firm in your local area that will do this for you. This is a FREE referral; service to you, without any obligation, and you are completely at liberty to negotiate with the firm concerned the terms for their advice and services. The information provided is on the basis of our understanding of UK tax law and Inland Revenue practice and is subject to change. This site is intended for persons aged 18 or over, resident or ordinarily resident, in the United Kingdom. email: bobstark@mortgagefor.me.uk

This is about Equity Release Plans. To understand the features and risks, ask for a personalised illustration. The actual APR rate available will depend upon your circumstances.

I recently succesfully challenged a DWP statement that a married couple were not entitled to Pension Credits. As a result, their income was increased by almost £175 per month

the other alternatives, such as downsizing, sale and rent and other forms of equity relese. If you fail to do so and make a mistake it may be difficult and expensive, if not impossible, to rectify it and there are often better solutions available.

Interest Only Mortgage
Mortgage Amount:
Interest Rate:

Weekly interest payment: