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Interest rate cuts `were not anticipated by consumers` Nearly half of young mortgage holders `need help from family` Abbey cuts mortgage rates New arrears guidance issued by CML Mortgage fraud `on the up` CML expresses concerns over sale and lease back schemes Business groups call for further rate cuts Interest rate cut `will help some struggling borrowers` Mortgage approvals `hit by continued market uncertainty` Company reduces rate of home loans Mortgage rates `to rise` Consumers `will be hit by reduced credit` `Nearly £20k` needed to secure a mortgage Borrowers urged to take advantage of good mortgage deals Mortgage lending falls in August Variable-rate mortgages `increasingly appealing to homeowners` Parents `relying on loans to cover school fees` Further mortgage rate cuts announced Remortgaging `on the rise` Mortgage lenders call for swap plan renewal

`Extra dimension of risk` with interest-only mortgages

03/10/2007

Homeowners looking to take out interest-only mortgages are adding an "extra dimension of risk" compared to those taking out standard mortgages, an industry expert has claimed.

Despite uncertainty in the financial markets due to the recent Northern Rock crisis, homeowners should look to avoid "unnecessary" risks with their home loans, Re-Financial Planning said.

Switching to traditional capital repayment schemes keeps the liability of the mortgage lender "exactly the same" and increases security on the loan, David Higgins, director of Re-Financial Planning, said. He added that the risk with interest-only loans is higher than the old endowment mortgages.

Mr Higgins commented: "Mortgage lenders are more lax than they`ve ever been. The high property prices have lulled them into a false sense of security. They know that even if the person doesn`t have the means to pay off the mortgage that they have adequate security."

According to figures from Credit Action, the average outstanding mortgage on a house in the UK is £97,209.

Many debts unaffected by base rate cut 09/01/2009 - Yesterday, many borrowers welcomed the Bank of England’s base rate 1.5% base rate – an historic low 08/01/2009 - Today’s base rate cut by the Bank of England’s Monetary Gas price cuts expected 07/01/2009 - Energy company Scottish Power has announced the launch of a Personal debt about £1.5 trillion 07/01/2009 - The UK’s personal debt stands at around £1.5 trillion, according