Interest Only for life?

lightspeed

Am i right in thinking that if somebody has an IO mortgage, before the end of their 25 year term, couldn't they just remortgage with another lender for the full amount or part of the remaining balance and spread this over a further 10 - 20 years (age permitting obviously)???

Thanks

MortgageMamma

It is possible to do this, but whether it is right for you or not depends on your circumstances. Contact a whole of market mortgage broker - Professional advice would be essentail for you if you are considering doing this.

MM

hobo28

Yes I suppose so but personally after 25 years, I'd hate to think I still owed the house to someone.

knuckledragger

lightspeed,
YES. Or you could just keep remortgaging for a 25 year period and build in some flexibility for the future. (knowing that your repayment vehicle was going to repay the loan much sooner than the 25 year remortgage term).

lisyloo

Yes I suppose so but personally after 25 years, I'd hate to think I still owed the house to someone.

You wouldn't owe the whole house.
You would owe the purchase price.
After 25 years the purchase price should be a lot less than the current value (no guarantee of course but very likely over 25 years).

I am of course assuming that you remortgage for the purchase price and don't increase the mortgage each time.
If you increase the mortgage then of course you will owe that amount.

lightspeed

Thanks for the replies - this is not my intention at all (i hate owing money and will try to pay off our mortgage as quickly as possible), i was just curious to see if it was allowed.

Thanks again

Debt_Free_Chick

I think there are some lenders that will do a "lifetime" mortgage, which is IO for life. On death, the outstanding balance is then paid from the estate. If there are no other assets, then the house will need to be sold in order to pay the capital back - so the house could not be inherited by others (unless they bought it, by paying the capital to the estate, which they then settle with the lender). Or insurance could be taken out to pay a lump sum equal to the capital on death, whenever it occurred.

EdInvestor

Debt_Free_Chick wrote:

I think there are some lenders that will do a "lifetime" mortgage, which is IO for life.

Once you convert the I/O mortgage to a lifetime one ( aka equity release) you don't have to pay the interest any more.You need to be retired to do this and obviously there needs to be some equity accumulated in the property.

lisyloo

Some lenders will insist on seeing so kind of repyament vehicle.
You could set up an ISA with driect debit for this purpose and then cancel it (if you wanted to do that - not saying it's a good idea).
The last 2 lenders I've had didn't want to know about any repayment vehicle they just made it clear that it was my responsibility to pay off the mortgage.

Buit be aware that some might want to see a repayment vehicle of some sort.
Lenders can make up their own policies so there are no blacl and white rules.