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An inside look at the interest only mortgage.
An Interest Only Mortgage is one where the repayments are made up entirely of the interest on the loan. When the mortgage term is complete, the capital originally borrowed is still outstanding.
To cover the balance, borrowers are advised to make regular contributions into an investment policy alongside their mortgage repayments. This can be arranged by the mortgage provider, most commonly in the form of an endowment mortgage, an ISA mortgage or a pension mortgage.
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