Interest only mortgage to fund new house post-separation

[partystress]

Looking like marriage is over. DD will be devastated and losing the only home she has known will make matters worse. Neither of us could afford to buy the other out. Small mortgage, about 15% of the value of the property. Very little headroom to take on additional outgoings, and late 50s, so long term mortgages not an option.

Rather than us ending up with two too small houses, would it be an option to take out an interest only mortgage secured on current house to buy one new one? Could fix rate for 5 years with repayments much less than renting somewhere even vaguely decent. This would get us through to DD being 19, and we could then sell both houses, repay capital, and split proceeds 50/50.

Any advice on whether this is feasible, and any pitfalls if it is, would be really appreciated.

How old is DD?

14

You'd need to speak to a broker but I think you need to demonstrate being able to repay an interest only mortgage (e.g. Pension lump sum). You also need to factor in additional stamp duty for a second property.

However, tbh I'd just split the money now so you can move on rather than incur buying costs and then worry about selling etc in 5 years. I'd say you'll probably be the one finding it hard - 14 yo can be pretty adaptable.

Thanks JoJo. She is already having some MH issues, so I am trying to think about how to minimise the impact. Also have DS at uni, and would be good for him to have home to come home to.