An interest-only mortgage allows the borrower to pay just the interest on their loan, meaning the amount borrowed stays the same. But could it be a ticking time bomb?
Though interest only mortgage rates haven't caused a stir here, they were dubbed the "villains" of the property crash in the US during the subprime crises.
There have been warnings in the UK about interest-only loans because too many borrowers have no plan to pay back the principal at the end of their mortgage term. The authorities there have tightened up on these loans, which were being taken out for up to 25 years. Read more:
Landlords bail on rental market
January 11, 2018
The "secret" mortgage rates banks don't want you to know about