More borrowers turn to interest-only

More borrowers are switching to interest-only mortgages to reduce their mortgage repayments.

Data from the Council of Mortgage Lenders showed around 24% of first-time buyers were taking out interest-only mortgages.

Many borrowers were taking out interest-only to reduce monthly bills.

A few words of advice from an Independent Mortgage Adviser ( i.e me, the blogger )...

Moving to interest-only repayments on your mortgage will help reduce your monthly costs.

It will be tempting for the 1.4 million borrowers whose fixed-rate deals are coming to an end this year. Many of them are on deals as low as 4.23% and with the current average fixed rate of 6% they face serious payment shocks.

However, borrowers may be storing up problems for themselves and should consider the move carefully.

However tempting switching from repayment to interest-only may be, unless borrowers have plans in place to eventually repay their loan they may be simply storing up problems for the future.

Getting to the end of the mortgage term and still owing the initial debt would be disastrous.

Think very carefully before making such decisions. Better still, talk to me and we can discuss your options fully, without obligation and without pressure.

After all, that's what I've been doing for the last 27 years !

As always, if you have any doubts about your current or proposed situation, and want to contact me, just click the link to my website on the right hand side of this page to get my contact details.