According to a report highlighted yesterday in the mortgages news, the ‘mortgage gap’ relating to interest-only mortgages could become a worrying problem in the near future.
The research, published by insurance, pensions and investment group LV= indicates an alarming gap between the amount borrowed and the lack of repayment vehicles amongst the 2.9 million interest-only mortgages in the UK.
The Group Chief Executive of LV=, Mike Rodgers, reportedly commented: "A previously booming property market led many people to bank on being able sell their home, use the proceeds to pay off the mortgage, and still have enough left to buy another home. However, this strategy may have been overturned by current and predicted future falls in property prices. These people should therefore seriously consider investing as much as they can now, and regularly, to help pay off the mortgage capital at the end of the term. We're concerned that so many of the homeowners we polled appear to have an over-optimistic outlook on their ability to pay off their mortgage capital at the end of the term. Or worse still they are turning a blind eye to the issue."
Mortgage gap on interest-only mortgages
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Mortgage gap on interest-only mortgages
Thu, 20 Nov 2008
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