Switching from Repayment to Interest Only

BTB1_2

Due to the current climate and future workload, we are considering switching from repayment to interest only.

I have always tried to avoid this, but am not sure exactly why.

A few questions, if you can help.

1. We are with the Chelsea and the fixed term ends next Feb...does this have any bearing on being able to switch?

2. Are there usually fees involved?

3. Can you switch for a set period, say 6 months and then revert back without any major hassle?

4. Does doing this have any negative effect whatsoever on your credit rating or credit worthiness?

5. Is it compulsory to take out and prove that you have another payment vehicle (endowment) etc or can you just take the risk (being only for a short period anyway)?

Many thanks for any help, and if anyone has any other ideas feel free to point them out.

BTB

_Andy_

1) No
2) Yes normally a nominal admin fee
3) Depends on the lender, ring to check but yes
4) Not usually, e.g. HSBC would record it as missed unless you were below 80% LTV.
5) Depends on lender and LTV

If you ring Chelsea they will advise.

BTB1_2

Andy

Many thanks for the swift reply.

My LTV is about 65%.

One other thing, would the Chelsea try and sign me up to a new tie in period in order to switch over?

I do intend ringing them, but just wanted a bit of knowledge first.

Thanks again.

_Andy_

LTV looks fine, doubt they'll be a problem.
No the tie in period only relates to the interest rate rather than the repayment method.