So what happens if you CAN'T pay the repayment part of your mortgage in this situation?

[LaurieFairyCake]

Citizens advice website says the lender is obliged to consider options if you can't pay - like shifting to interest only

A year ago we asked our lender to shift to interest only as there's enough equity to sell off our flat and pay off our second home (where we want to retire to)

They said no as we have to earn £150,000 a year to do that

Now we HAVE been allowed as the government has forced them to do it for 6 months

We want to keep that going and just pay interest only until we retire in 10 years, sell our flat and pay off our second home

Are they likely to let us?

(My health means that trying to do two jobs is too much for me and at some point I'm going to burn out and HAVE to shift into one job. We can't go and live in our second home and give up work as we're too young)

Will send you a PM as that's my preferred solution as we've enough equity

https://www.zoopla.co.uk/for-sale/details/65198451/?search_identifier=da4fc2fa1a4ae3c2f7f1fff49638d8a1593d1d376be742d9f9a2ec01c5792b31

Staines to West London is an easy commute - done it on and off for years. Not an exciting property, but shows they exist.

You’re not remortgaging, though - I think you have the terminology confused. Remortgaging would be effectively paying off this mortgage and borrowing afresh. You just want to switch your mortgage product to a new one, with the same amount borrowed and the same term, is that right? You can do that yourself, on line, with no affordability checks.

How come you can’t put your variable rate back onto fixed? You’re not taking out a new mortgage so no affordability check needed and as long as you’re not in arrears they should be able to facilitate moving to a better fixed rate.

Just wanted to add that most btl mortgages don't allow you to rent to a family member or live in it yourself so tread carefully when having these discussions with your lender.

Was the £80k deposit for the btl 25%? If it was more then you could consider remortgaging to release some of that and paying down your residential so you owe the max to the interest only mortgage. Although I presume your btl rate would be higher than your residential so may not make sense for you.

@EbiRaisukaree I think you have the terminology confused. Remortgaging would be effectively paying off this mortgage and borrowing afresh. You just want to switch your mortgage product to a new one, with the same amount borrowed and the same term, is that right? You can do that yourself, on line, with no affordability checks.

This is what I said upthread- you should beable to get access to your mortgage account online then change the mortgage product without even speaking to your bank!

literally no one predicts property prices falling 60% and it's never happened

I'm trying to think what happened to my parents
On realtor advice, they listed for $705k.
They finally sold (chasing offers down for almost 2 years) for $430k.
So that's only a 39% fall, fair enough.
Except I don't think they sold at bottom. Maybe not.

It's never happened in the UK (though it has in ROI)

I experienced a 40% drop in the UK 1988-1995. That was bad enough.

We paid £75k for this house in 1994. Listed in 1991 for £120k - still.on at the same when we offered.

Our first house had been sold to previous owners for £69k. We bought in 1991 for £52k. Sold in 1994 for £49k.

When did they sell? The 1994 was almost lowish point. They rumbled on a bit stabilising around then. I think by 2000 they were well back on the rise.

One thing that I would like to point out, when you pay Interest Only is that you will end up paying far more money. If you have a repayment mortgage, the first few years are mostly interest and as time goes on you pay less interest and more towards the capital loan. You are constantly paying a LOT of interest which never reduces and it still doesn't touch the capital loan

If you can't go IO, how about trying to get the longest term available to you in order to get the lowest repayments?

I would get advice from a good mortgage broker. Getting ideas on here might give you comfort but a mortgage broker is a professional who can look at your situation objectively without personal opinion. Some people have made comments about you having a second home etc, a good mortgage broker wouldn’t do that and would act in your best interest.

When you say 're-mortgage' do you mean borrow extra money, or change your rate as they are 2 different things.

If you're up to date with your mortgage payments (have no arrears) and have come to the end of your current rate (or want to switch early and pay a penalty) then you can do so without an affordability assessment.

The mortgage charter means banks can offer you a temporary switch to IO for 6 months, OR you can extend the term.

I would suggest you speak to a broker to discuss a rate switch if you want to shop around. Or speak to your current lender if you want to stay

You can get longer term mortgages though, when we bought our current house the bank insisted we take a longer term than we wanted (would be well into retirement) the only proof you need is that you are paying into a pension (they didn't even seem to care how much). We didn't want to end up with a mortgage for that long so have been either overpaying or saving.

But if you can't afford to save then that could be an issue.

I would never bank on keeping that equity in your current property as the housing market is very unstable, especially at the moment. As you do have equity in your other property (you said £80k deposit), you may have to face selling it and help relatives find alternative accommodation for now. In order to easy the burden on your main property, don't forget if you put this money back into your main property your interest payments will go down.

Don't forget banks are a business and don't really care much for individuals. You have to look out for yourselves I'm afraid.

@LaurieFairyCake it sounds like you need a multi stage plan.

If you are interest only for six months try and build a small buffer. Ask to extend your mortgage with your current lender to the maximum term permitted.

Between the two it might buy you a year to see where things are at with your husband's health. Absolute worst case get an interest free credit card to cover some living expenses to be paid off on the sale of the house (something I'd only entertain if there was a fixed period of say six months you needed to stay for a child to finish uni or such like).

If in that time he hasn't improved then I think that living in presumably the s-e is no longer tenable.

You then need to consider whether you'd be better to sell and buy a mortgage free property nearer to the buy to let. Is there a larger town or city where you could continue your work? Even if at a lower level given your outgoings should reduce.

You could buy something with future rental in mind e.g near a hospital.

Then when the time comes to retire, move to the terrace and then rent out the other property (hopefully switching the mortgages round). Or if you like it just stay there and sell the other property.