How often have you been tempted to spend some of the collateral in your property? Imagine spending some of the money on a luxury holiday, revamping your home or just putting some extra money into your current account so that you don't have to worry about the utility bills.
But then also imagine, instead of leaving an inheritance for your children, you leave a big mortgage.
A new mortgage has been introduced, named the 'inter-generational' mortgage. This enable a person to just pay the interest only with the capital sum remaining unpaid until the death of that person, the mortgagee – then the children of the mortgagee will have to decide if they want to take on the mortgage or sell the house. (Bearing in mind that the children may themselves be tied in with their own 'inter-generational' mortgage.)
Obviously there are concerns whether this is actually a good scheme. Even though it is cheaper at the beginning of the term, in the long run it works out much more expensively for the mortgagee. How, for instance, would people be able to pay the mortgage when they are in retirement?
It appears that the only people who would benefit from this would, surprisingly, be the mortgage landing companies.
Are we surprised though?
Aine Callan
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