Anyone with an interest-only mortgage will find the onus is on them to arrange how to repay the capital at the end of the mortgage term.
This is why most borrowers with interest-only home loans take out some kind of long-term savings plan, such as an endowment policy, savings account, pension plan, or use the disposal of assets, including an investment portfolio or property, to repay the capital loan.
This guide will explain how to make sure you meet Mortgage Market Review requirements when advising on interest-only home loans, getting a repayment vehicle in place and what lenders look for when assessing borrowers for this type of mortgage.
Supporting material for this guide was provided by: Keith Barber, associate director of business development at Family Building Society; Martin Richardson, general manager of business development at Leeds Building Society; Dale Jannels, managing director of Atom (All Types of Mortgages Ltd); Ray Boulger, senior technical manager of John Charcol; and Andy Nicholls, mortgage and insurance specialist at IFA Beaufort Asset Management.