The Times looked at interest-only mortgages this weekend, and in particular borrowers who do not have a repayment strategy in place.
Thousands of these loans are coming to maturity and figures suggest that around a third of interest-only homeowners will face a shortfall of more than £50,000. Experts recommended that those who can should make the switch to a repayment (or Capital and Interest) mortgage now, and start paying off that shortfall. Overpaying on the mortgage could also be an option, as could extending the mortgage term, but borrowers would need to speak to their mortgage lender first.
Some homeowners may consider moving to a smaller property as a way of reducing their debt, and the Sunday Express looked at the pros and cons of downsizing. While there are potential advantages such as cutting household bills or clearing an interest-only shortfall, borrowers were urged to factor in the costs of moving home. Smaller properties are not necessarily cheaper of course, and older borrowers will still be required to provide proof of affordability beyond retirement.
Elsewhere, the Observer reported on the latest economic forecasts, some of which are now predicting an increase in interest rates as early as the beginning of next year. Mortgage holders were urged to take advantage of today’s record low rates before they disappear.
What the papers said about interest only mortgages and downsizing