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OneFamily Adviser

The interest only timebomb

Posted in: Products

30,000 homeowners a year in potential limbo.

There’s an estimated one million homeowners with interest only mortgages maturing by 2025, and research indicates that 27% of them won’t be able to pay off their loan when the mortgage ends.

This equates to 30,000 homeowners a year in potential limbo with an average unsettled debt of £21,000.*

So if you’ve got clients reaching the end of their interest-only mortgage who want to stay in the home they love, here are some of the reasons why our Interest Payment Lifetime Mortgage could offer them the perfect transition:

It’s an easy switch

Your client could move from an interest only residential mortgage to a OneFamily lifetime mortgage, with the same outstanding debt, without any affordability checks

It’s similar to what they’re used to

In the same way as their residential mortgage your clients can chose to pay off the interest on the loan every month with our Interest Payment Plan and protect all the equity they currently have in their home. And just like residential mortgages they can choose from a fixed or variable rate.

It offers them much more flexibility

  • The interest payments are optional should circumstances change and they wish to stop making payments, the interest can be rolled up instead
  • Flexibility to change their mind – with options to repay the loan in full (with no ERC after 10 years, Fixed ERCs for the first 10 years, and Downsizing Protection after 5 years).
  • They could increase their loan. To help them make the most of the early years of retirement or help their children get on the property ladder. Use our lifetime mortgage calculator on our website to see how much your clients could borrow today

To understand how our Lifetime Mortgage can help your interest only mortgage clients:

* Cebr research – The UK Market for Residential Interest-Only Mortgages

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