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Interest only morgage

beautifulgorgeous_2 Posts: 802 Forumite

3 March 2006 at 4:00PM in Mortgages & endowments

Is it ever a good idea to have an interest only mortgage? My friend is talking about getting an interest only mortgage for £180000. This includes her current IO mortgage and 40,000 of other debt, the interest rate willbe 4%. The house is on the market for £325,000 but is not selling.
This will bring the outgoings on debt and mortgage to £600 a month instead of £1400. She says that she can cover this amount herself as she and her partner are probably splitting. The alternative is renting but what to do with the property while it sells?
Please help as I do not want her to make a disasterous mistake when she already has so much on her plate with the probable split.

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Interest only morgage

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