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Interest only mortgage
Your monthly payment to us only covers your
mortgage interest – not any of the
original loan. The loan is repaid at the
end of its term from the proceeds of an
investment which has been taken out separately
to act as a repayment vehicle. Examples
of investments that can be used as vehicles
to repay a mortgage are endowment policies,
pension policies, PEPs or ISAs.
It is important to remember that the value
of any investment is subject to market performance,
so can go down as well as up. This
means there is no guarantee that the investment
fund will be sufficient to repay the loan
in full. It is your responsibility to ensure
that adequate funds are available at the
end of the mortgage term to repay the original
loan.
Whichever
way you choose to repay your mortgage, we
recommend that you take out life
cover or mortgage
protection.
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