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I have interest only mortgage but no endownment policy. Do I just need to pay back the original mortgage amount as the interest is being paid?

HMac
by HMac 24 June 2012  |  Comments 1 comment  |  Love Love  0 loves

The mortgage is with Santander and is only for £15,000 as part of a shared ownership policy. The endownment policy was cancelled some time ago and was never replaced. As the amount is quite low I just want to check that I only have to pay the £15,000 as the interest is being paid monthly? Thank you.

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Comments (1)

  • fodigie
    Love rating 2
    fodigie posted

    That sounds about right.

    With an INTERSEST ONLY MORTGAGE you are required to pay off the interest that arises from the principal that is borrowed. Because only the interest is being paid off, the interest payments remain fairly constant throughout the term of the mortgage. However, interest-only mortgages do not last indefinitely, meaning that the mortgagor will need to pay off the principal of the loan eventually.

    Posted on 03 July 2012 | Love Love  0 loves Report

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