Repayment Mortgage Vs IO + Pension

silvercar

superjuz said:

Really appreciative of the replies, thank you. I had no idea IO mortgages were as good as obsolete on a residential properties.

I don’t think they are as obsolete as some seem to think. My son got a part IO part repayment mortgage from Barclays recently.

dimbo61

So if you a high net worth customer and borrowing alot of money with lots of equity in your house the bank may well say yes to an IO mortgage.
For the rest of us the Computer Say NO.

Rich people or Higher rate taxpayers 40/45% can pay extra into a Pension and get Tax relief to clear the IO mortgage in 20/25 years time.

Postik

One strategy that some lenders will accept for an IO mortgage is that you intend to downsize at the end of the mortgage term.  I imagine this would only be acceptable if you have a big enough chunk of equity though.