Repayment to Interest Only with Alliance and Lesceiter

jimpy1979uk · 28 July 2010 at 8:13PM

Hi all,

I've come up against a hurdle, I currently have a repayment mortage with A & L and was hoping to switch to interest only so that I can rent the property out to go overseas.

The problem is that A & L have said that the will not change to interest only without a repayment vehical being in place to pay the mortgage off. So effectively making the cost of going to interest only the same as a repayment mortgage.

Has anyone else come against this?

Thanks for any information anyone can bring to the table.

Jimpy

Thrugelmir · 28 July 2010 at 8:20PM

Under recently released FSA guidelines, lenders have an increased responsiblity towards their borrowers. This is one of those measures.

CloudCuckooLand · 28 July 2010 at 10:29PM

You don't need to be IO to rent it out. Just make sure the rent more than covers your mortgage, so the tenant is paying off some of your capital...if the mortgage is so large that covering the repayments would make it unrentable, then you don't want to keep the property, because when your consent-to-let runs out and you are switched to a buy-to-let product, the higher rate will crucify you.