Interest-only mortgages may suit qualified professionals and graduates, an expert has advised.
As a large number of young professionals are expecting incremental pay increases, interest-only mortgages may enable them to keep costs down, advises Ray Boulger of John Charcol.
Furthermore, as many graduates have debt such as personal loans or credit cards which may have a higher rate of interest than the mortgage, they would be advised to pay these first, Mr Boulger states.
"If you take an interest-only mortgage, have thought it through and with a strategy to repay the mortgage in due course, then it's not a problem," claims Mr Boulger.
However, interest-only mortgages could be dangerous for borrowers who have not made sound financial plans, the expert believes.
"If you take the interest-only option purely as a way to afford a mortgage, and you haven't thought how you are going to repay that mortgage back, then that is asking for trouble," he said.
Mr Boulger recently advised that discount mortgages and tracker mortgages still offer the best value for most UK borrowers.
Interest-only mortgages suit graduates, expert advises
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Interest-only mortgages suit graduates, expert advises
Tue, 11 Jul 2006
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