Repayment or interest only?

Melissa177

Hmm, I'm not sure I agree with that. Over short periods, you can make money on an I/O loan for a property, particularly if you have bought a property below market value and then sell above.

A "below market value" property might be one where the seller wants/needs to get rid of it sharpish.

Also, most people who have I/O mortgages have an investment/savings plan to repay off the capital - like an endowment mortgage.

kingkano

Melissa177 wrote: »

Hmm, I'm not sure I agree with that. Over short periods, you can make money on an I/O loan for a property, particularly if you have bought a property below market value and then sell above.

A "below market value" property might be one where the seller wants/needs to get rid of it sharpish.

Also, most people who have I/O mortgages have an investment/savings plan to repay off the capital - like an endowment mortgage.

Actually I think in the last year you'll find the opposite true. Too many people are seeing I/O as just a cheaper mortgage and not even considering how they will repay the capital (Oh I will change to repayment in a few years, my house will be worth more later, etc etc).

Noz

Think you need to read Martin's guide to Mortgages asap.