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If you have an interest-only mortgage, you have only been paying the interest on the loan, rather than the debt back.

For example, if you have a £100,000 interest-only mortgage for 25 years, at the end of all those years of payments you will still need to find £100,000 to pay off the capital.

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Borrowers who took out interest-only mortgages over the past two decades have been bombarded with headlines in recent months about the timebomb emerging as a result of people being unable to repay their home loan.

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Last modified 27-Feb-2020 17:00