So many people were sucked into the vortex of interest only mortgages as a result of the 1980's - 90's sale of endowments. I myself succumbed to the lure of that pot of gold at the end of the rainbow. My two bed flat on Finlay Drive bought at £25K in 1992 - they said would be paid off with the policy proceeds and my pockets would be bulging with the extra dosh that I would make as a result of riding the stock market. Needless to say that never came to pass and I was left with a sizeable shortfall. Thankfully, I off loaded to flat to my fiancee at the time and continued to pay into the policy. There are many out there who have not been so lucky.
There is some good news on the horizon in the shape of Interest Only Lifetime Mortgages. Previosly Scottish Building Society had been prepared to look at an interest only mortgage maxed at 35% LTV meaning that you could borrow £35K on a property worth £100K. It helped some but the max LTV was too low to help a vast majority of the market. Now they are about to come out with a 50%LTV product. So you can look at getting £50K from that property valued at £100. They will even through in a 3 year fixed rate to boot.
Now that's more like it!