Interest only mortgage, what else do I need?

getmore4less

VfM4meplse wrote: »

I agree that they are not for everyone, those on a higher rate tax band gain the most benefit here but then it depends on you attitude to risk. If the long term aim is to own your own home the cheapest way is by avoiding excessive long-term interest and repaying the capital value of the loan rather than saving through alternative financial products. The right mortgage will allow maximum flexibility and you will still be able to afford life's luxuries.

The reason I say interest-only mortages are for BTL only is because of the tax relief available on the interest payments, I would not wish for my homeownership to be compromised by fluctuating markets that endowments and other investments are inevitably subject to. Whilst they can do well the actual return is unpredictable: "past performance is no guarantee of future returns" . Pensions are subject to exactly the same risks. An overtrusting approach to these financial products has caused a lot of people untold misery over the years at a point where they should be looking fwd to financial security.

Interest only does not require any investment based vehicle you have introduced a non relevent factor.

The Tax relief is also not relevent since there is no income to offset.


Interest only with self managed capital payment is a perfectly reasonable approach and can be more efficient than an offset or repayment.

The offset does provide some extra flexability but not everyone needs it.

VfM4meplse

getmore4less wrote: »

Interest only with self managed capital payment is a perfectly reasonable approach and can be more efficient than an offset or repayment.

A self-managed capital payment also requires a more discipline than an offset mortage.

Sonofa

Thanks for the options guys, but let me try to avoid this thread going too off topic.

My "attitude to risk" is that I want/need the security of knowing just what my outgoings are going to be. I'm not interested in speculating to accumulate as I don't have a Plan B should things not work out in my favour. Any extra money I have would be plowed into the house for the forseeable future.

Dan