Interest Only

Reid and Co Financial Services Ltd do not offer mortgage services, however you might be interested to read the brief summaries under the various headings shown in this section. They are purely provided for general guidance only and should not be relied upon. Your mortgage is probably the largest financial transaction and commitment you are likely to undertake. You should always seek mortgage advice which is totally independent and individually tailored to your needs.

How does it work?

Your monthly payments represent only the interest due to the lender, and do not include repayment of capital. Your total loan must be repaid at the end of the mortgage term. You therefore need to arrange additional investments which will generate sufficient capital to repay the loan.

ADVANTAGES:

1. You can choose from a variety of investments, some of which have tax advantages.
2. Should you move or arrange a remortgage, your investment can usually be reallocated to the new mortgage.

DISADVANTAGES:

1. Unlike a repayment mortgage, the amount of debt outstanding does not reduce over time
2. There is no guarantee that the investments chosen will grow sufficiently to repay your loan.

Your home may be repossessed if you do not keep up repayments on your mortgage.