The government wants the banks to clamp down on interest only mortgages. Obviously there are tax advantages for these mortgages with BTL properties but can someone explain this situation on our own home mortgages: I always change my home mortgage every 2 or 3 yrs to take advantage of low introductory rates. Now as I see it you don’t really start to pay down the capital of a standard mortgage for several years. If I didn’t have an interest only, then by chopping and changing I’d be paying a highly monthly payment but not seeing a reduction on the overall balance.
I’d like to come off int only mortgages but I’m not prepared to move onto the banks standard rate once the deal is over. We have a huge amount of equity in our rental properties so I’m not worried about being able to pay off our home loan once we choose to so.
Can someone tell me if I’m talking nonsense or how to get around this situation.