Interest only - what are your views?

[NKF]

Is it a total disaster (unless you expect to inherit sufficient to pay off loan)? I know many people who've done it and while I admire their courage (and often the places they get to buy), I'm not sure.

i would say avoid it like the plague
seriously

Don't do it.

I think it is v risky

Well, I'm not seriously thinking of doing it but sometimes I do the sums and think about how much more we could buy and get a bit, you know, wistful.

We are going to remortgage for interest only because we plan to sell the house really soon and are remortgaging simply to pay for a new kitchen and bathroom - and to finish some renovations before we put it on the market - in the meantime we want to keep our monthly outgoings down - we had a pretty good downpayment when we bought the house a couple of years ago and our house price has increased and will increase further with the updated rooms, so we are taking a calculated and minimal financial risk.

i dont think yo u are that much better off, are you? if you include life insurance etc

ive had both mortgages and hardly noticed the difference tbh

About half the outgoings.

I mean if our current mortgage was interest only, the monthly payment would be halved. So if we bought on interest only, we could buy a much bigger place.

but i f you include insurance...

well anyway i dont think its worth the risk. chances are you wouldnt be able to pay off the loan in the end

We have interets only on our flat that we rent out but would not do it if we were going to live there

Some people I know are taking the view that they'll just downsize later. It's a scary thing and I doubt that we'll do it.
Just another example of different attitudes to risk, I guess.

Cash sweeper mortgages?

It is risky if interst rates keep rising and house prices fall though as negative equity is a real possibility

Wouldn't do it.

Offset. I know about those. Will do that in the future.

I think so. I have a friend who does all that 0% borrowing and puts it into his offset mortgage and has some strategy for paying off his home loan very very quickly.

We have interest only. Plan to pay off early anyway but it makes sense to us as the value of the mortgage will be worth less in 20 years than it is now. Ie a thousand pounds was a lot 20 years ago but not so much now.

Jodie - what's the plan for paying off early?

I've done it but not with a mortgage.