04 Feb 2022

Is It Worth Paying Off an Interest-Only Mortgage?

Paying Off an Interest-Only Mortgage

Some lending industry insiders believe that paying off any mortgage in its entirety is not a good idea. However, the decision is up to the homeowner. Plus, some circumstances benefit from becoming debt-free. Reports leading up to 2022 show that homebuyers prefer fixed-rate home loan rates. As interest rate rises loom for Australians, lenders continue making variable-rate mortgages more attractive.

Conventional loans carry fixed rates. They also continue having the toughest requirements including a 20% deposit. Homebuyers who do not qualify for conventional mortgages find themselves applying for variable-rate loans including the interest-only version.

Once you obtain this home loan, paying off an interest-only mortgage early and completely become two options. The interest-only portion lasts five or 10 years. Once this period expires, the homeowner will see a jump in their repayments. Therefore, sending extra during the interest-only period is a wise move. 

With the uncertainty of interest rates and the potential for a jump in them, a homebuyer can consider paying off this mortgage completely. Moreover, the homeowner must remember that their repayments will see a jump once the interest-only period expires. 

Mortgage House works with clients to help them achieve their financial goals. Our loan specialists have tools to find the products that match those goals. It’s possible to find the right product in many circumstances. 

Paying Off an Interest-Only Mortgage Conclusion

In some cases, paying off an interest-only mortgage makes sense. Mortgage House loan specialists help homebuyers obtain financing for their purchases. Plus, we can offer additional home loan guidance. Contact our team today.

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