Interest only mortgage allows you to pay the interest only on the mortgage for a fixed period of 5 to 10 years. The question therefore is whether it is suitable for all or for some target group of beneficiaries.

Retired persons often require planning their financial affairs with caution and care. Apart from various other issues they are also often faced with the inheritance tax planning. Normally the interest only mortgage will be suitable for those pensioners who wish to have a small initial payment against their mortgages. Though the principal remains in tact since they go on paying the interest only, this might be a help for those who are in financial stringencies and expect to resolve them at a later date. They expect to repay the principal when their current financial crisis is resolved.

Persons who desire to pay the principal at such convenience often prefer the interest only option. This helps them to deal with the situation when the financial position is tight. However, it is always the better option to carry on paying a part, however small it could be, of the principal as well so that your loan burden gets reduced gradually.

At times you may buy to let mortgages so that you earn a better income in the process. In such cases the interest only method helps you getting the breathing time to go over from one mortgage to another.