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Interest Only
Mortgages

With an Interest only mortgage, the mortgage payments that you make every month comprise of only the interest charged by the bank for lending the funds to you. No capital repayments are made and thus at the end of the mortgage term you will still owe the bank the original loan amount.

If you take out an interest only mortgage, you are required to take out a repayment vehicle that will provide the required capital at the end of the term to repay the outstanding loan amount. A typical and suitable repayment vehicle would be an Individual Savings Account also know as an ISA.

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