Interest Only Loans

When repaying an interest only loan, you pay off only the interest only on the loan for a fixed time.

This reduces the amount of your repayments for a set period, but not the balance of the principal you borrowed.

Typically investors look at taking out an interest only loan as they want to build a portfolio of property investments, as any excess income can be used to buy more properties rather than paying down the capital. But at some stage properties will have to be sold to repay the loans.

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