Interest Only switch

confused3085

Hi (first post)

We have an outstanding mortgage of £140k and credit card debts of about £14k. We meet all the payment no problem. We come of a discounted tracker deal in March. I would like advice as to whether ths following may be a viable way of clearing credit card debts.

Switch to interest only mortgage, use the saving in monthly mortgage payment >£1k to repay credit card debt and then on completion >18mnths change back to a repayment mortgage, tracker.

Obvisously the credit card debts have the higher interest rate. We pay more off each month than the minimum amount but as you can appreciate the interest on £14K is quite steep.

Any advice greatly appreciated.

_Andy_

Depends on LTV and lender.
How much is the home worth (be realistic) and what lender are you with?

confused3085

Hi

The house was valued at 240k just over 18 months ago so probably about 210 - 220 today. And the lender is 'The One Account', I think....

_Andy_

Worth a go then, give them a call and they will let you know

confused3085

The One Account don't, as far as I know, do interest only mortgages so I would need to find another lender!

Is the principle of my idea sound? For those that have a keen eye for these things is it a viable plan or am I likely to run intoproblems?

Anastasia

I think you would find it difficult to get an interest only mortgage. Consider the costs involved in arranging a new mortgage. If it was me I would transfer the debt on the credit cards to 0% cards or cards with a lower life of balance interest and focus on getting rid of that debt.

Thrugelmir

See if you can have the mortgage term extended while keeping the mortgage on a repayment basis. The saving on the mortgage outgoing could then be used to start making inroads into the credit card debt.