Interest only Mortgage with downsizing as security?

haynestim

I want to know if any mortgage companies offer interest-only mortgages where the ability to pay-off the mortgage is covered by a commitment to downsize in the next 4 years as security?

We are retiring, have the clear and proven ability to pay our current Halifax interest-only mortgage payments until the end of term (which runs until we are 65) from a mixture of investments and income, but want to minimise our payments until we downsize, which will definitely happen in the next 4 years.

We could move now, but do not want to, given we know we have enough equity to buy the type of house we want when we downsize, after we have cleared the mortgage.

Help?

Thrugelmir

How you repay an interest only mortgage is entirely up to you. Whether you are granted one depends on the lender and your circumstances.

Your committment wouldn't be enough, as very easy for you to renage if you so wished at a later date.

_Andy_

Depends on LTV but generally not.

bank_leper

Hijacking the thread a little ... but wonder if anyone can help ...

We have an interest only mortgage ... we cashed in on the Endowment a few years ago which helped get us out of debt, and reduce outgoings. We then remained at lower levels which allowed us to add 2 children to our family and pay for them through nursery. We're now at a point where we need to start making inroads to sorting the mortgage - 20 years to go and £122k outstanding .. still on interest only.

Endowments now don't seem to be an option ... so what is the current alternative please? We have life cover ... but assuming we both do make it to retirement age how else can we sort out being able to pay the debt - other than flogging the house, and hoping it covers the debt.

thanks

GMS

Convert to Repayment mortgage asap or look at other investments to repay the capital

shortchanged_2

bank_leper wrote: »

Hijacking the thread a little ... but wonder if anyone can help ...

We have an interest only mortgage ... we cashed in on the Endowment a few years ago which helped get us out of debt, and reduce outgoings. We then remained at lower levels which allowed us to add 2 children to our family and pay for them through nursery. We're now at a point where we need to start making inroads to sorting the mortgage - 20 years to go and £122k outstanding .. still on interest only.

Endowments now don't seem to be an option ... so what is the current alternative please? We have life cover ... but assuming we both do make it to retirement age how else can we sort out being able to pay the debt - other than flogging the house, and hoping it covers the debt.

thanks

Life cover is not a repayment vehicle, particularly if you both survive to the end of the mortgage term.

Your best option as GMS states is to go to repayment.