First-time buyers ‘could benefit from interest-only home loans’

Young professionals looking to buy a house in Scotland may stand to benefit from interest-only mortgage payments, it has been claimed.

Although these kinds of mortgages are not usually advised, they may help householders take control of their outgoings, Alexander Hall has claimed.

The mortgage advisory service stated that this may be of particular benefit to people in the right circumstances, such as young professionals.

Andy Pratt, chief operations manager of Alexander Hall, explained that when starting off in a career, people have options open to them, which may allow them to pay off their mortgage in lumps sums.

He said: "Instead of relying upon the lender to control the amount that they pay off on the loan, some feel quite knowledgeable and confident enough to pay the interest and control for themselves how much of the loan they pay off by doing it in lump sums every two or three years."

This may be of particular benefit for first-time buyers moving to different parts of the UK, he added, which may resonate with people who want to buy a house in Scotland.

The number of people opting for interest-only mortgages increased from six to 20 per cent between 2002 and 2007, according to the Council of Mortgage Lenders.