Mortgage lenders should regularly review customers with interest-only mortgages to prevent them losing their homes when they reach retirement, according to Moneynet.co.uk.
The website says that lenders should review the situation of interest-only borrowers with no repayment vehicle every three years or they may not have enough funds to repay the original loan by the end of the term. Moneynet.co.uk also claims that many borrowers could reach retirement without being able to pay back their mortgage, leading to severe financial problems. Interest–only mortgages now make up around a quarter of all new mortgages and are often the only way for first time buyers to get onto the property ladder. A repayment of mortgage of £150,000 at 6% over 25 years would cost...
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