Repayment or interest only

carolann312

We are coming to the end of a 7 year fixed rate this month (5.89%). We were thinking of taking out a new fixed rate deal (2 years) on an interest only basis so that our monthly repayments would drastically drop and we can pay off some debts (credit cards) and get some money behind us for house improvements, etc. Then when the fixed rate deal is up again in 2 years time we will revert back to repayment on another deal. Would this be possible and advisable?

Squish_21

You'd have to check the possibilty with your mortgage provider.

Do you have a lot of debt to tackle? It may be worth doing the home improvements while you can but remember your LTV may go up unless the improvements conteract this.

_Andy_

carolann312 wrote: »

We are coming to the end of a 7 year fixed rate this month (5.89%). We were thinking of taking out a new fixed rate deal (2 years) on an interest only basis so that our monthly repayments would drastically drop and we can pay off some debts (credit cards) and get some money behind us for house improvements, etc. Then when the fixed rate deal is up again in 2 years time we will revert back to repayment on another deal. Would this be possible and advisable?

You need to ask your lender. Give them a call.

dimbo61

Have you considered an offset mortgage with First Direct ?
You have to pay at least the Interest Only part of the mortgage each month
but you can also build up savings in the offset pot ( use for home improvements)
Consider a long term fixed rate deal ( rates are very low at the moment)
Only my opinion and good luck