Monday 8th May 2006
The number of people taking out an interest-only mortgage has doubled in the past four years, according to research from moneysupermarket.com.
Although the research found that this type of mortgage can cost homeowners up to £12,000 more in the course of a lifetime, Which? has advised that an interest-only mortgage can often be the most beneficial depending on an individuals circumstances.
Emily Green, principal researcher at Which? commented that interest-only mortgages can be the best way for some people to get onto the property ladder, but for those who do they must be aware of tracking the investment.
Paul Fincham of Halifax added that it is "important to implement a savings plan that will run alongside" an interest-only mortgage, and that for the majority of people repayment mortgages may offer the most rewards.
He said: "Repayment mortgages remain the obvious choice for most homebuyers simply because people want to have the knowledge that they are repaying their mortgage."
He added at present in the UK "the culture is to overpay" when it comes to mortgage repayments.
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