Avoid interest only move: moneysupermarket.com

Although moving to an interest-only mortgage is often the cheaper option, it will dramatically increase the overall cost of a mortgage, according to new research.

Analysis from moneysupermarket.com shows that switching to an interest-only mortgage should only be treated as a last resort to free up some much needed cash, as homeowners will end up paying more in the long run.

The site says consumers will typically have to pay a further £18,000 over the course of their £150,000 mortgage if they decided to move to interest-only repayments for the first seven years of the 25-year loan rather that make repayments from the offset.

Louise Cuming, head of mortgages at moneysupermarket.com, said: "This might seem like an easy way to free up some extra cash. However, unless you really can not afford to continue making repayments at the current level it could be a very expensive mistake."

Selecting the right mortgage is crucial to a successful self build project. A mortgage for a self build differs slightly from a typical mortgage for homebuyers as the money is released in stages as the build progresses.