Expert expresses interest-only mortgages concern

Ray Boulger, of independent mortgage broker Jon Charcol, said that only the most self-disciplined should take out such a mortgage as it was easy to end up with large debt.

Commenting on the amount of people getting their first home on top of student debt, Mr Boulger asked BBC Radio Five Live: “The question is will people actually in practical terms start paying back the mortgage in a few years time?

“Interest-only for a few years and then switching over to repayment is fine, but you’ve got to make sure you do it,” he added.

Mortgages that require borrowers to repay only the interest accrued on debt can be a tempting offer to many, but without paying the capital the amount owed can quickly add up.

Mr Boulger said he was concerned that people will have other debt priorities before their mortgage which would mean that they quickly run up a large repayment bill.

However, for those with the “discipline” to repay mortgage debt, interest-only mortgages could provide some temporary relief to borrowers, added Mr Boulger.