With an interest-only mortgage loan, interest is paid on a monthly basis throughout the term of your loan, with no reductions made to the amount originally borrowed.
At the end of the term of your mortgage, all borrowing must be repaid by you. This means that when you take your loan out, you must set up a savings or investment scheme, which will produce sufficient funds to repay your total loan at the end of the term.
Should you require advice on an interest-only mortgage and a savings and investment scheme, you should contact an Independent Financial Adviser. A list of these within your area can be accessed on the following website: www.ifap.org.uk
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