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Interest Only - Catastrophe Waiting To Happen?


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Just discovered that my sister and her fiance bought their house on an interest only mortgage five years ago for 280k, so obviously not one penny piece paid off. No method of repayment in place, naturally.


Four bed three bathrooms, spread over three floors. Northeast.


Shes 43, he's 51.


I went to town on her, asked how she intended to pay it off given he'd be retired in 14 years and her in 22. All I got was blank looks and "Well I haven't really thought about it". 


I couldn't believe it.


I've since discovered that more than half of the people I know are in interest only, some for nearly 15 years, and none of them have any plan in place to pay it off.


I find this astonishing, but it's set me wondering: just how widespread is this?


If this is a national problem then it doesn't bear thinking about.

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