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Interest-only mortgage v Repayment
itsmymoneynottheirs
Posts: 1 Newbie
Hi,
I'd really appreciate some advice here. First, the facts:
- I've got an £85k Repayment mgge w/Abbey, a 3-yr discount deal
- the "handcuffs" come off this mortgage in Dec 06, at which time I can then look around or ensure I get a Discount renewal from Abbey (which is what they did 3 years ago)
- I now want an extra £50-70k, for house improvements
- Abbey can increase my Repayment mgge to accomodate this, and will set it up such that at Dec 06 it's packaged with the original Repayment mgge and I can then shop around for the total
- a 2nd option is to take out an Interest-only mgge, as my wife and I have some long-term endowment savings which will mature in 15-20 years and can cover this.
My question is: if I go with the Interest-only mortgage, do I then lose out on the opportunity of being able to shop around for the best discount every 3 years? Thanks!
I'd really appreciate some advice here. First, the facts:
- I've got an £85k Repayment mgge w/Abbey, a 3-yr discount deal
- the "handcuffs" come off this mortgage in Dec 06, at which time I can then look around or ensure I get a Discount renewal from Abbey (which is what they did 3 years ago)
- I now want an extra £50-70k, for house improvements
- Abbey can increase my Repayment mgge to accomodate this, and will set it up such that at Dec 06 it's packaged with the original Repayment mgge and I can then shop around for the total
- a 2nd option is to take out an Interest-only mgge, as my wife and I have some long-term endowment savings which will mature in 15-20 years and can cover this.
My question is: if I go with the Interest-only mortgage, do I then lose out on the opportunity of being able to shop around for the best discount every 3 years? Thanks!
0
Comments
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it doesnt matter if you take an interest only mortgage or repayment mortgage, if you take a discounted rate you are likely to be tied in for a certain length of time after which you can remortgage and just pay the lender an admin fee of about £225. they repayment/IO option makes no difference whatsoever.
I would recommend that before you sign up for another mortgage you speak to a whole of market mortgage advisor, perhaps around october, to see whats on the market and if they can beat the deal your existing lender is offering
MMI 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.0
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