Interest only mortgages ‘could reduce home loan payments’

By choosing an interest-only mortgage Britons could be able to make savings on their home loan repayments, it has been suggested.

According to chief executive of MoneyExpert Sean Gardner, opting for an interest-only could save consumers some £238 a month on their home loans.

However, Mr Gardner advised that borrowers should be cautious of the risks that come with interest-only mortgages as it involves relying on increasing house prices and eventually being able to pay off their loan after receiving a "windfall".

He claimed: "As long as borrowers are aware of the risks then it can make financial sense to opt for an interest-only loan as the monthly savings are significant and can make the difference in being able to afford a mortgage."

Research conducted by the Council of Mortgage Lenders revealed that some 85 per cent of first-timer buyers opted for a fixed-rate mortgage over the course of January, due to fears of a rise in interest rates.

Interfinancial providing you with breaking homeowner loans news.