possible to mix repayment and interest only mortgages?

sinderella_2

Hello folks
I've searched the forums and not found this question asked - forgive me if I'm wrong:o

I currently have a house worth approx 200k and a mortgage of 100k. It has (gulp) 7 years to go on a ten year fix (made that decision when got stung in 2005 when our monthly payment went from 450 to 750 in a few months and just stayed there...got frightened of anything but a fix and rightly or wrongly decided that the longer the better.

The mortgage is portable, with woolwich (now barclays) but I want to move and borrow a further 200k so I would owe 300k. Is it ever possible to borrow the further amount as a mix of repay and io or even is it possible to get the remainder as just io? Obviously I need to contact barclays to ask them but have just seen 'the' house this eve so thought I'd see if anyone knew.

Would I have to get it all with barclays (whether io or repay) or do people sometimes have more than one mortgage company on the same house?

hope this isn't garbled
thanks all

henrik1971

Yes.

I have a 93k mortgage with Halifax - 65k on interest only and 28k on repayment.
It arose because my original mortgage was for 65k, but then I added another 30k a few years ago.
At that time, the two parts of the mortgage were also on separate rates/products. Both deals ended around the same time and then I put the full amount onto a new fixed rate last year - but the mortgage is still "split" as mentioned above.

sinderella_2

thanks Henrik!:beer:
that has answered much of my q but still not sure whether I could take the new amount as a mixture of io and repayment while still keeping the original repayment with woolwich - meaning I would have 3 separate components

Thrugelmir

sinderella wrote: »

Hello folks
I've searched the forums and not found this question asked - forgive me if I'm wrong:o

I currently have a house worth approx 200k and a mortgage of 100k. It has (gulp) 7 years to go on a ten year fix (made that decision when got stung in 2005 when our monthly payment went from 450 to 750 in a few months and just stayed there...got frightened of anything but a fix and rightly or wrongly decided that the longer the better.

The mortgage is portable, with woolwich (now barclays) but I want to move and borrow a further 200k so I would owe 300k. Is it ever possible to borrow the further amount as a mix of repay and io or even is it possible to get the remainder as just io? Obviously I need to contact barclays to ask them but have just seen 'the' house this eve so thought I'd see if anyone knew.

Would I have to get it all with barclays (whether io or repay) or do people sometimes have more than one mortgage company on the same house?

hope this isn't garbled
thanks all

If I was a mortgage underwriter I would be asking how the £200k of interest only mortgage was going to be repaid?

I certainly wouldn't want an exposure of £300k once interest rates start to rise in the future.

Your main lender would have first charge on the property which would discourage other main stream lenders. Who would charge a higher rate of interest for holding a second charge.

sinderella_2

thanks Thrugelmir - I had a feeling I would have to stick with Barclays.
The increase in available funds is due to me being back at work having finished the earlier years of child raising - and no I won't be having any more!!!

Thrugelmir

You may be glad that you went for such a long fix in 7 years time!

sinderella_2

Thrugelmir wrote: »

You may be glad that you went for such a long fix in 7 years time!

I'd love to find a reason to be glad of it, right now it seems a pain! When we weren't fixed the rates shot up and now we are they have crashed - I know people paying less than a quarter each month than they used to and using the remainder to bring down the capital or save, yet we've got the same old mortgage each month :mad: Guess it saves on a remortgage fee every 2 years though...

Cazza

You can mix interest only and repayment mortgages on the same account, it's known as "part and part" and is not unusual at all, particularly with those people who started off with an iterest only mortgage with an endowment and have changed part of the mortgage to make up any shortfall. As Thrugelmir says, Barclays will want to know what plans you have to repay the interest only part of the mortgage at the end of the term.

As far as mixing up mortgage companies, for your main mortgage this won't be possible. So, if you wanted to transfer ("port") your existing mortgage with Barclays, you couldn't then go to Halifax for another mortgage - both lenders would insist on having first charge over the property.

This is a completely different situation to taking out a secured loan after completion, for home improvements say, in situations like that a lender would be happy to take a second charge, after the main mortgage lender. HTH!

Cazza

sinderella wrote: »

I'd love to find a reason to be glad of it, right now it seems a pain! When we weren't fixed the rates shot up and now we are they have crashed - I know people paying less than a quarter each month than they used to and using the remainder to bring down the capital or save, yet we've got the same old mortgage each month :mad: Guess it saves on a remortgage fee every 2 years though...

It might be worth you checking what the redemption fees are on your current rate and the payments you would make if you were to remortgage to another lender, very occaisionally, it can be worth paying the ERCs anyway.

sinderella_2

v. helpful caza, thanks! Went back to the house today...