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Original poster

does anyone have an interest only mortgage without a repayment vehicle?

36 replies

bossykate · 13/12/2005 14:35

and if so, how do you plan to repay the mortgage when the time is up? or do you plan to sell up and move on at that stage?

i'm asking because i'm about to be made redundant and i don't really want another job.

having done the figures about 50 million times, i think the only option for me not to work would be for us only to pay the interest on our mortgage...

i have one friend who does this - up to now i've thought he's mad! just wondering if anyone else does this, why and how do you expect the mortgage to resolve?

TIA

OP posts:

batters · 14/12/2005 08:54

This reply has been deleted

Message withdrawn at poster's request.

handlemecarefully · 14/12/2005 08:56

What about going for a repayment mortgage but negotiating a longer repayment term than is usual (which would presumably bring monthly payments down)?

SilentBite · 14/12/2005 09:24

How about getting a lodger to help pay the mortgage

batters · 14/12/2005 11:43

This reply has been deleted

Message withdrawn at poster's request.

shrub · 14/12/2005 12:07

we're interest only with abbey - when i go back to work we can pay a £30 fee to switch it to the repayment option.
a question for all the other interest only mn's - were you open in your mortgage interview that you didn't have an endowment/seperate savings account for the repayment? we adjusted our monthly outgoings to make it look like we could afford to save seperately we are due to remortgage in the new year

Glitterygook · 14/12/2005 12:15

Shrub, we were open about it and our lender said they advise you to have a repayment vehicle but don't insist. However it's a current account mortgage so the idea is that you can you use it as a repayment or interest only mortgage as it suits you iyswim. We've paid £20K off it in about 2 years just by putting all our money in there and saving on interest as it's calculated daily. We do all our spending for the month on a credit card (which we clear at the end of each month) and all our bills go out at the end of the month - that way, for most of the month our pay is sat in the account saving money on the interest.

IMO, if you are good at managing money, these accounts are the best way to pay off your mortgage.

shrub · 14/12/2005 12:30

thanks glitterygook - not good at managing money though. sounds like a very good system

fsmail · 14/12/2005 19:49

We are going interest only for about a third of our new mortgage and I am a financial adviser, my dh is accountant so not giving us our own advice but we will start paying it back when dd gets free nursery in two years time as we will not be paying nursery costs. Some times it has to be done.

Original poster

bossykate · 14/12/2005 20:11

thank you everyone for these replies (and to batters for the bump) i really appreciate all the comments and suggestions.

am mulling it all over at the moment - you will appreciate that it is a big decision...

thank you

OP posts:

ParrupupumScum · 14/12/2005 21:15

Oh sweetie. Sorry about the redunancy. Do hope as batters says that it will turn out for the best. (btw, 100% of the people I know who've been made redundant have found that it's turned out for the best) Definitely think it's worth exploring options around switching temporarily to an interest only mortgage. When we thought we might be moving HSBC offered us a mortgage which was interest only for the first few years and then transformed to repayment.

Original poster

bossykate · 08/01/2006 20:19

hello everyone

back for an update.

thank you very much for all these replies. have thought about it long and hard over the holiday period and have decided for us it is too risky.

we can't (anyway wouldn't want to) count on inheritance, dh is ascending the career ladder but it's public sector so can't count on that and i'm trying to devise options that will give me a long-term option rather than just a career break.

instead, i think i will use the redundancy payment as "seed capital" and go for a role contracting for the next 2 - 3 yrs. the idea is that i will then be able to save an amount, which, together with the redundancy pay-off, will knock a big enough hole in the mortgage to give me more options. this is a high risk strategy though!

of course paying interest only will still be there as a short-term emergency option if neeeded.

thank you all very much for your input, it has really helped

ps - cd, i like your lodger idea and even got as far as investigating how much we could charge... but unfortunately we would need to spend a few grand on the house to really make it possible. so i think i will leave that at the idea stage for now. thanks anyway, it is a great suggestion.

OP posts:

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