An interest only mortgage requires you to make monthly payments to the mortgage lender in order to pay off the interest on the amount borrowed. In addition to the interest only mortgage you need to establish a repayment ‘vehicle’ that will accumulate enough funds to pay off the full loan amount at the end of the repayment period.
The repayment vehicle required to pay off the mortgage can come in a variety of forms.
- You can choose an ‘investment vehicle’ that is tax efficient.
- If the investment growth rate exceeds those estimated at outset you may be able to pay off your mortgage early or enjoy a lump sum at the end of the repayment period, in addition to paying off your mortgage.
- You have no guarantee that you will have sufficient funds to pay off the mortgage at the end of the repayment period, as the investment could perform below that assumed at the start. (By monitoring your investment’s performance you could make additional contributions during the repayment period if you felt the fund was under performing.
- Some forms of investment may incur a penalty fee if you stop paying premiums.
- You debt remains constant throughout the mortgage period.
Your property may be repossessed if you do not keep up repayments on your mortgage.
For mortgages we are paid NO FEE. We will be paid commission by the lender.
For investments we act as introducers only.
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