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IO repayment vehicles?

How much would I expect to pay per month on an IO mortgage of £90K?

I have quotes for repayment but am keeping my options open! Thanks! :-)

Comments

  • koexelek
    koexelek Posts: 7,847 Forumite
    edited 6 August 2009 at 5:11PM
    Depends how many years you plan to take the mortgage over

    If it was over 25 years, I'd say roughly £180-£200pm
    I am a Mortgage adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • 20 years or so. mmmm think maybe repayment would be the better option then, thanks!
  • DesG
    DesG Posts: 1,291 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    What has the mortgage term got to do with the interest only payment amount?

    The only thing that will affect an interest only payment is the interest rate.

    90K at 5% APR will cost you £375 per month in interest whether it is a 10, 20 or 30 year mortgage.

    Cheers, Des.
  • DesG wrote: »
    What has the mortgage term got to do with the interest only payment amount?

    The only thing that will affect an interest only payment is the interest rate.

    90K at 5% APR will cost you £375 per month in interest whether it is a 10, 20 or 30 year mortgage.

    Cheers, Des.

    Sorry, asked it all wrong, I meant how much would a repayment vehicle (ISA or similar) cost me per month to cover £90k when the mortgage comes to an end? ...
  • opinions4u
    opinions4u Posts: 19,411 Forumite
    mad__money wrote: »
    Sorry, asked it all wrong, I meant how much would a repayment vehicle (ISA or similar) cost me per month to cover £90k when the mortgage comes to an end? ...
    It depends on the investment performance of the repayment vehicle selected.

    Endowments were designed to do the job, but most failed. ISA and PEP funds have been used. Most failed.

    The more you pay, the less the risk of failure. But even with exceptionally high premiums there is still the risk of an investement not delivering enough to repay the mortgage.

    Unless you have an unusual set of circumstances I would suggest a repayment mortgage, with the guarantee of "make the payments in full and on time and the debt will be nil at the end", is probably going to be the most appropriate option.

    Lower risk repayment vehicle = more expensive.
  • Thanks!! We have worked out finances and shall be going back to repayment, we only switched to IO in Feb due to change in circumstances, but so long as we get the deal and amount we want we'll be able to cope fine!
  • How much will you be charged to do so? Can you overpay, which in effect is repayment with the flexibility of being in control to pay more or less than required depending on circs, as if the SHTF then you will only be liable to pay the interest only payment for as long as needed.
    If you have a low interest rate currently then either save the money in a BS account or overpay.
    Nothing to see here :beer:
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