Interest only mortgages

With an interest only, mortgage, You pay only the interest to your lender. This means you need to make a separate payment into some sort of savings plan, so you can build up a lump sum to pay off the mortgage at the end of the term.

The three main types of savings plans are: endowment policies, ISA and pension plans.

You must keep up the payments Or you are unlikely to build up enough to repay the loan. The investment plan you use is not guaranteed to pay off the loan and you will have to make up any shortfall.

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