Thousands of pensioners face interest-only mortgage problems: report
Between 5% and 10% of pensioner households with an interest-only mortgage are likely to run into problems when it comes to paying back the actual loan, according to research published on Monday by pension think-tank Netspar.
That means up to 46,000 households may not have enough money to pay back the capital because they have not saved up enough cash or begun paying it off over the 30 year duration of the mortgage.
And new rules for extending mortgages will make it even tougher because their retirement income will not be high enough to qualify, researcher Mauro Mastrogiacomo said.
Moving to a smaller house or into rental property may also not be an option because they do not have enough capital to buy a property and too much to qualify for social housing.
Given the complexity of the problem, there is no general solution and banks will have to come up with tailor-made solutions, Mastrogiacomo said. Making it easier to extend an interest-only mortgage is one of these.
Interest-only mortgages became popular in the late 1980s and early 1990s and the repayment problems are only just beginning to emerge. The Dutch central bank warned in 2017 that repayment was likely to be a problem.
Thank you for donating to DutchNews.nl.
We could not provide the Dutch News service, and keep it free of charge, without the generous support of our readers. Your donations allow us to report on issues you tell us matter, and provide you with a summary of the most important Dutch news each day.
Make a donation