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interest only to capital repayment ?
suzyp1982
Posts: 255 Forumite
can it be done easily 
In my other thread i mentioned that my brother wants to buy a run down house and do it up, so for 2 years could he take out an interest only mortgage (so that he is paying less out in the first 2 years) then after that swap/remortgage to a capital repayment?
In my other thread i mentioned that my brother wants to buy a run down house and do it up, so for 2 years could he take out an interest only mortgage (so that he is paying less out in the first 2 years) then after that swap/remortgage to a capital repayment?
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Comments
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NO problem at all - he can either ask the current lender to change this over (they may charge a fee for this) or when re-mortgaging to a different lender he can set it up as a repayemnt mortgageI am a Mortgage AdviserYou 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.0
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He needs to have the funds available to pay off the mortgage at end of term. What if he can't get a repayment mortgage in two years due to unforeseen events? i.e., suffers a critical illness and is not earning?
Interest only repayments are the same over two years or thirty years as you're only paying interest on a level balance.
Take a longer term int only mortgage which has no penalties for paying off early. Then you're able to repay with proceeds of a re-mortgage in two years and plan the future on a repayment basis.0
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