When is an interest-only mortgage ever a good idea?

I have been offered an interest-only �200,000 mortgage, but am wondering whether any investment option will give me the return I need over 25 years to pay off the balance. Can anyone recommend a suitable portfolio or give me the pros/cons for this mortgage type? Cheers

Asked by katie.jenkins

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Answered by Arthur Wang
I graduated from business school in 2004, and several of my classmates used an interest only mortgage when making their first home purchase. The rationale for them was that they wanted more home today with the expectation that they will earn more money in the future. For some this worked great, for others that did not see the salary increase and did not save the cash from the lower payments that come with interest only they may face bigger issues given the current labour environment.

In terms of figuring out how much more home you can buy because of the lower payments, these calculators are great:

Interest only calculator - http://www.simplyfinance.co.uk/calculators/fixed-rate-30-year-interest-only-payments-calculator.html

Standard mortgage calculator - http://www.simplyfinance.co.uk/calculators/mortgage-payment-calculator.html | 11.03.10 @ 16:47
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$commenter.renderDisplayableName() — {comment} | 09.24.17 @ 15:57
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