It’s worth noting that not everyone manages to do this. As such, your lender might check to see if your repayment plan is in order at various points throughout the term.
However, for the first few years, the amount that goes towards clearing the interest will be much higher than the amount that goes towards clearing the debt.
When you take a mortgage, you will have to decide how you will repay it. Interest-only mortgages are designed such that your monthly payments only cover the interest charged on your loan.
At the end of the mortgage term, you will still owe your lender the initial capital borrowed.
As such, while you may enjoy smaller monthly repayments, you need to have a solid plan on how to pay back the capital.
Keep in mind that mortgage lenders will want to know exactly how you intend to repay the loan, and not all lenders will accept all forms of repayment vehicles, such as inheritance.
Cons of Interest-only mortgages. Since the capital you owe is not shrinking, you might have to continue paying interest on the full amount for longer.
