Advantages and Disadvantages of
Mortgages

Advantages of Interest Only Mortgages

• Debt remains the same.
  
• Amount available can be higher for younger people than roll up schemes, as not based on age.
  
• Short term fixed interest rates are lower than available under roll up schemes.
  
• Can be particularly useful as a temporary alternative measure for people who would prefer a specialist scheme, but are currently too young to obtain any of the best specialist schemes. (Then once eligible a specialist scheme may be used to replace the mortgage thus stopping the need to make monthly repayments.)

Disadvantages of Interest Only Mortgages

• You need to make monthly repayments for the lifetime of the mortgage - thus increasing your expenditure.
  
• If you fail to keep up the repayments your home could be repossessed.
  
• Although interest rates are currently low they may increase, unlike a specialist scheme where once taken the interest rate remains fixed or capped for life. Although, fixed rates are available they will only generally be fixed for between 2-5 years time.
  
• If you wanted to move, the loan would be repaid at the time, which may leave insufficient money to buy a new property, you would then need to obtain a new mortgage. Lending or personal circumstances may change resulting in you finding it difficult if not impossible to raise sufficient new money at the time.
  
• Should you want the loan to continue once you retire, lenders may limit the amount available to a multiple of your pension income, which may not be sufficient for your needs.
  
• Mortgages established based on joint incomes, may become unmanageable on first death, possibly forcing you then into moving or taking a specialist equity release scheme.

Your home may be repossessed if you do not keep up repayments on your mortgage.

For arranging ordinary mortgages we can be paid by commission, or a fee of usually £750 or a combination of both.

If you do not qualify for an equity release plan or would prefer an Interest Only Mortgage please complete our enquiry form and select interest only mortgages (monthly repayments) in the type of scheme preferred.

Please note: All equity release products involve borrowing against, or selling all or part of your home, and may work out more expensive in the long term than downsizing to a smaller property, and may affect your entitlement to State benefits and grants. There may also be more suitable methods of raising the funds you need.