Interest only for a few months? Advice please

naomijj

Hello :-)
We are currently fumbling in the dark for our lightswitch and one of the things we hoped to do to try and get us back on track (aside from live on £20 a week for 6 weeks to enable us to pay off the overdraft - but thats another story!) was to either take a repayment holiday for three months on our mortgage or move the payment date from the first of the month to the end of the month (as I know others who have done both). However HSBC have to win an award for the least helpful mortgage provider and have said they don't do holidays and if we move our date from 1st Oct to 30th Oct they will charge us double!! I know others who have done it and effectively given themselves a months grace but clearly that doesn't work with HSBC!:mad:
One thing they have suggested is to go interest only for a short period of time (3 months I think). But until the manager comes back on Friday they can't put it forward. Sorry for the ramble I am getting to the point! We have a mortage payment of 326.69 per month on the main mortgage of approx 32k, we also have a 10,000 homeowner loan at 14.2%!!!!! that costs us 110 a month. both come out together on the first. Our main mortgage is on a fixed rate until january and when that ends we are going to put them both together and remortgage (possibly elsewhere after this!). Does anyone know if by going onto interest only for 3 months we would be adversely effecting either our credit or the fixed rate we are on?
Thanks for reading if you got this far! :beer:

_Andy_

It won't affect the rate - you need to check with HSBC as to whether the temporary interest only period will be recorded as an 'arrangement' or just as paid payments on your credit file (I can't remember what their policy is).
Make sure you're clear on this before you do it.

In fairness HSBC have never claimed to offer payment holidays - they're a very conservative lender.

opinions4u

I would suggest setting the ball rolling on the remortgage around November time, to ensure completion can take place as soon as you go penalty free.

Make sure you keep up to date with everything between now and then!

That Homeowner loan is at a scary rate!

naomijj

_Andy_ wrote: »

It won't affect the rate - you need to check with HSBC as to whether the temporary interest only period will be recorded as an 'arrangement' or just as paid payments on your credit file (I can't remember what their policy is).
Make sure you're clear on this before you do it.

In fairness HSBC have never claimed to offer payment holidays - they're a very conservative lender.

Thanks Andy - I guess it just came as a shock to me because I hadn't thought that they might not let me - stupid I know!
I will check what you suggested - Thankyou
:beer:

naomijj

opinions4u wrote: »

I would suggest setting the ball rolling on the remortgage around November time, to ensure completion can take place as soon as you go penalty free.

Make sure you keep up to date with everything between now and then!

That Homeowner loan is at a scary rate!

Thanks opinions4u - I didn't fully realise how bad the rate was until just recently - we have only had it a few months. Now I ma finally halfway across the room and fumbling for the lightswitch I have had a good hard look at everything and its scary! I will start shopping round for a new mortgage. We aould be looking for it over 1o or 11 years (thats all we have left on the current one) and it would be for about 45 with a house value of 110k (at the mo!) any suggestions on where to look? I am new to this game - DH had the house when we met and we have so far only renewed fixed rates with hsbc.
Thanks again - the support on these boards is amazing :j

_Andy_

I know you've been put off by the experience of HSBC but they do have some very competitive rates - e.g. you could go on to the tracker (0.99% above base, so 5.99% at the moment) with no fees at all, and no exit fees if you did want to leave.

opinions4u

I would start with the Best Buy tables in the Wednesday / Sunday press and then speak to a lender directly and also see a broker. Also dig around the price comparison sites (for example, but not exclusively https://www.moneysupermarket.com).

Don't sign up for anything until you're sure you've researched the best deal at the time.

I think rates may be a little lower come November, so any recommendation today is worthless.

My best advice is to keep the belt tight and keep the bills paid. Clean credit record and lower loan to value = best deals on the market!

_Andy_

To the OP - I checked and if HSBC allow you the three months interest only it will be recorded on your credit file as arrears.

getmore4less

what rate is the current mortgage,
what are the penalties for changing now.

Even with penalties and an increased rate on the main loan it still may be cheaper than keeping the 10k going at 14%