Mortgage and ill health

J4ck_2

hi I have recently been pensioned off work due to ill health Halifax BOS have paid my mortgage for the past year which ran out a few months ago.

My question is can i change my morgage to an interest only deal and keep life cover as at present?
As this would reduce my outgoings substantialy at the present time.
Many thanks for any advice given.

Thrugelmir

How do you propose paying off your mortgage in the longer term?

J4ck_2

Hi thrugelmir

I have savings at present which could pay off my mortgage but as i still have ten years left on my mortgage i am thinking this may be a way to reduce my outgoings at present

J4ck_2

Also with my ill health the chances of me dying befor the ten years left on the mortgage are greatly increased.

Thrugelmir

Hi,

Sorry to hear your news.

Taking a pragmatic view. I would consider the impact of rising interest rates into the view. As putting your mortgage onto interest only, will merely mean an increasing cost in the years to come.

Why not continue to repay the capital. May offer a better return than achieved on your savings.

Then in a few years time reappraise the situation. Sell your home and rent. Then enjoy the released equity.

J4ck_2

Thanks for your reply

But would changing to interest only pay out the outstanding mortgage if i died before term ends or would i be better leaving as is

Burridge60

If you have a repayment mortgage the chances are that the life cover will also be reducing and you should inspect the policy document carefully. This means that if you go to interest only to reduce your monthly payment nothing will come off the capital debt to the lender. If the policy life cover continues to reduce then this may fall below the level of your outstanding mortgage.

J4ck_2

Thanks i will check it out first