If you can afford to maintain your current monthly payments on an Interest Only basis, but are unable to get a high street mortgage due to your age or income then this may be for you.
Benefits – You remain 100% owners of your home. You can choose how much you want to pay and for how long without putting your property at risk. If you pay the full amount of interest each month, the amount you owe against the property will never increase.
If your circumstances change and the interest payments become unaffordable, they can be stopped at any time.
The interest rate when you take out the plan is fixed for the rest of your life. This means that your payments will never increase.
With this type of plan you can even choose to have more money available for releasing in the future, this is known as a draw down or reserve plan.
Disadvantages – The amount available depends on the age of the youngest borrowers. Any monthly interest not paid will be added on to the amount owed and will ‘roll-up’ against the value of your property.
