Interest-only time bomb ticks ever louder
An estimated 75 per cent of all borrowers aged 60+ have an interest-only mortgage with a third needing to be repaid within the next four years.
Many of those, however, are without the means to repay the capital.
Some will consider selling their property. This understandably is an incredibly emotional and stressful decision. However there is another option which could offer interest-only borrowers a way to either eradicate this severe financial predicament or, at least, help subsidise the deficit.
Richard Espley, Head of Equity Release at Goldsmith Williams, explains:
“Interest-only homeowners face one of the toughest challenges in the property market, a situation exacerbated by the prospect of having to sell their beloved family home in order to meet the repayment.
“With so many older homeowners affected by this we support calls for mainstream lenders to find solutions for people in and approaching retirement with an outstanding mortgage. One existing solution, however, is equity release.
“Allowing homeowners to release funds from their property whilst retaining the right to live there, equity release could be a viable way for homeowners to address their interest-only nightmare.”
Content correct at time of publication