I realise the advantage of an interest only mortgage is that the monthly repayments are lower than if the mortgagee has a repayment mortgage.
If someone borrows, for example, €200,000 over 25 years on an interest only mortgage, then over the 25 years they will only be paying the interest on the borrowed €200,000.
Therefore at the end of 25 years they will owe the lender €200,000.
How do people then repay this capital of €200,000?
If someone borrows, for example, €200,000 over 25 years on an interest only mortgage, then over the 25 years they will only be paying the interest on the borrowed €200,000.
Therefore at the end of 25 years they will owe the lender €200,000.
How do people then repay this capital of €200,000?