Mortgage Express..change from Interest only to repayment???

dannib_2

Hi,
Hope someone can help.

We currently have an interest only mortgage with Mortgage express fixed at 5.99% until april 2010. After this it changes to 1.75 above boe base rate.

We really need to change it over to repayment, as its stupid to keep paying this amount every month and not getting none paid off.

If we change over before April next year it is going to cost just short of £8000 to do so, but obviously if we change over now we are going to be saving about £350 a month, and paying money off our mortgage too.

I am stuck as to swallow the charges, and be better off monthly and long term, or to ride it out for another year and then change. (we currently pay £900 a month interest only, so basically thowing that away each month!!)

Anyone got any advice what would be the best to do???

Thanks
Danielle

TEDDYRUKSPIN

At this current moment you can still overpay on the mortgage. You will have to ask what the maximum limit is, and this can range from roughly 10% to 20% per year. So... you don't have to wait to switch to capital repayment.

Each company are different and will be happy to switch the mortgage to capital repayment without any costs.

Phone them up and see.

At this moment of time, I know mortgage express are really doing badly and have alot of repossessions on their books. They might be really happy for you to start paying off the mortgage.

morg_monster

well, it would be a £8000 effectively for 10 months. So £800 a month. Even without doing any calculations it doesn't seem likely it would be anywhere near worth it, unless you have a low LTV and can change onto a really low rate. The interest you save in the long run, on making repayments for 10 months instead of paying interest only, is not going to be much at all.

Why not just save as much as you can for the next 10 months and then in April next year find a repayment mortgage that allows overpayments, and then drip the savings into the mortgage as overpayments from april onwards, as much each month as you can?

edit - sorry teddy replied better as i was writing. overpaying now is a much better idea.