It all depends on your long term goals.
Me, i would rather live in a large house with a few acres of land with my interest only mortgage: when I come to sell it in 25 years, im hoping it will be worth a lot more than i paid for it, and the mortgage will be paid off with the profit. Thats the optimists view.
Or you could live in a smaller hous, go repayment, clear your mortgage, and buy a bigger house if you so wish. I wouldnt knock an interest only mortgage though: my brother in law has made at least 500k profit on houses by going interest only on circa 5 house sales over 6 years.
You certaintly dont need to be paying over the odds for an interest only mortgage though, and you can get at least 90% LTV with the right guys.
It really all depends what you want out of life.