Interest Only Mortgage

Interest only mortgages have become increasingly popular in recent years. Interest only mortgages may be supported by an endowment policy, pension plan or ISA in which case they are normally referred to as an endowment, pension or ISA mortgages. An interest only mortgage may, however, be arranged without the support of any particular repayment vehicle.

Many lenders will now accept payment of interest only on the basis that the borrower makes their own arrangements to repay the capital at or before the end of the mortgage term. This could be done in a number of ways such as inheritance, sale of the property or from the realisation of other assets.

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