Thousands of homeowners who took out an interest-only mortgage are at risk of losing their homes because they can't afford to pay back the debt when their mortgage term comes to an end - More than 80,000 interest-only mortgages will end in the next 12 months, but more than one in eight borrowers have no way of paying it back according to the Daily Mail.
Borrowers on these types of loans only pay the interest on their mortgage each month, meaning the monthly payments are less than an equivalent repayment mortgage but the mortgage capital does not reduce.
The problems could be worse for borrowers who are approaching retirement and may not be allowed to remortgage due to their age and the fact their income will drop when they stop working.
What should I do if I have an interest only loan?
If you have an interest only mortgage, you should have a repayment vehicle in place to repay the capital (the amount you borrowed) at the end of your mortgage term. Be sure to check your repayment vehicle regularly to ensure it is on track to provide the funds you need to repay your capital at the end of the mortgage term. If you don’t, you will have a large amount to pay and in certain circumstances may need to sell your home to repay it.
If you are unsure of your repayment vehicle or mortgage options, speaking to a mortgage adviser can help.
The earlier you speak with a mortgage adviser, the more time you have to make a difference. Even if you think you can’t afford to do much now, speaking with an adviser can help you understand your possible options and potential changes you may need to make in the future.
So don’t delay, speak to an Embrace Mortgage Services financial adviser today.
Your property may be repossessed if you do not keep up repayments on your mortgage.
Embrace Mortgage Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.
Thomas Morris (Property Management) Limited trading as Thomas Morris is an introducer appointed representative of PRIMIS Mortgage Network, a trading name of First Complete Limited for the purpose of the provision of advice in relation to mortgage and non investment insurance products. Mortgage and Protection advice is provided by LSLi Ltd t/a Embrace Mortgage Services, an appointed representative of PRIMIS Mortgage Network, a trading name of First Complete Limited. First Complete Ltd is authorised and regulated by the Financial Conduct Authority.
Contact Your Local Thomas Morris Sales & Lettings Branch or Embrace Mortgage Services Direct on 01480 474488