Cashpoint

More than half of over-55s with interest-only mortgage debt don’t know how they will pay off their balance when their loan term ends.

Research from Legal & General shows most borrowers are unaware of the options they have to clear the debt. Worryingly, many people thought amounts between £50,000 and £100,000 were small so there was no need for a repayment plan.

The problem is that many people don’t understand interest-only deals and are not facing up to the fact that the outstanding balance has to be repaid at the end of mortgage term.

It’s vital the 1.7 million people with outstanding interest-only mortgages have a plan to clear their balances.

There are various options available, from downsizing to gradually switching a loan from interest-only to repayment and lifetime mortgages secured against the value of the property. Don’t leave it too late to start tackling interest-only debt.