If you have an interest only mortgage, you do need to ensure that you have the means to repay the balance at the end of the term. If you feel your repayment plan may not be adequate you should review it as soon as possible, to give you time to take action. If you intend to repay your mortgage from an investment, the first step should be to obtain an up-to-date valuation, and then discuss this with your Independent Financial Adviser (IFA). If you do not have an IFA, you can find one at unbiased.co.uk.
If you are planning to repay your mortgage by selling the property and downsizing, you could start by getting an idea of the value of your property, and where you could move to, by checking Zoopla or a similar website.
Alternatively, if you are retired or close to retirement age, you may be able to convert to a Retirement Interest Only mortgage or consider taking out an Equity Release mortgage to repay your interest only mortgage. An Equity Release mortgage is a specialist product which we do not offer, so you would need to speak to a Mortgage Broker or IFA about this.
Other possible options include making overpayments and/or converting your mortgage to a repayment mortgage. The latter would increase your monthly payments, as you will be paying an amount off your balance each month. Please contact us if you wish to discuss this.
We will contact you from time to time to get an update on your plan to repay your interest only mortgage, but don’t wait for our contact before taking steps to ensure you are on track.
You can get more information about interest only mortgages at Moneyhelper.