This week on Ask Rob & Rob, Jacob asked:
How do I pay off my interest-only mortgage?
With an interest-only mortgage, your debt is never paid down, so what do you do? The answer talks about inflation, and how it can reduce the value of your debt, which becomes less valuable over time. If it’s not fully inflated away over time (and it does take time), another option is to sell off some other properties in your portfolio to pay off the mortgages on the rest. If you only have one property, that leaves you the option of selling it to clear your debt.
You can also just keep your mortgages going. Paying off a mortgage is a natural inclination to have, but mortgage debts for buy-to-lets can keep going for decades. This leaves you vulnerable if interest rates go up, but it’s not like it actually has to be fully paid back after 25 years – there’s a lot more flexibility than you first think, even if letting a mortgage run isn’t for you.
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