Interest only mortgage decision

[Fork2fork]

Hi,

Wonder if anyone could offer any advice on our current remortgage decision. We are with Nationwide and part of our mortgage is interest only on their BRM currently 2.25, with possible movements in interest rate I thought it may be a good time to change our product.

We can get a 5 year fixed at 1.94. Didn't think we would have the option to stay on interest but apparently we do. We overpay each month above the repayment amount and with the new product can overpay by up to 10 percent of original loan.

I was all set to go to repayment but I am now wondering if it's worth staying on interest only and overpaying by full amount allowed (twice that of repayment) and get it paid off in 7 years. DP is main earner and it's just comforting I know should there be a need we could drop down to interest only for a short period.

Am I thinking this through clearly or missing anything. Sorry very dry boring question but any advice would be greatly received. Thanks

Hi - that's just what we have done - left the mortgage as interest only but overpaid the maximum ten percent allowed each year. I think as long as you are disciplined enough to make sure you do overpay then it's a good way to ensure you have the safety net of reverting to interest only for a period if you need to.

We had the advantage of paying only the interest payments while I was on mat leave and when I was made redundant, but have been able to overpay constantly for the last few years and so should now hopefully be mortgage-free by the end of the year.

Thank you for replying elefump. Oh to be mortgage free, proves it can work. Think will we stay with interest only