Quick mortgage question

hsbcarter_2

We're currently on a mortgage of 1.1% above base rate on a repayment mortgage - I know this is a good deal!

If interest rates were to rise dramatically - and I know none of you can give me a definitive answer - but is it relatively easy to go from a capital repayment mortgage to an interest only mortgage at the same rate?

i.e. I wouldn't want to lose this deal but could reduce our outgoings by swapping in the short term to an interest only at the same rate?

Anyone got any advice on how likely a mortgage lender is to agree to this?

Thanks in advance.

HSB

getmore4less

Some will some won't

LTV will be a significant factor but not the only one


Best bet is to save up as if you were paying at a higher rate.

Save rather than ovepay while the savings rates are higher than the mortgage rate.

Wh05apk

Few lenders will allow you just to switch, unless you can show you have an acceptable repayment vehicle in place, such as an ISA, even then most will charge you a fee to change (~ £50) if you were looking short term, most will allow you short term if you were struggling.

I suggest you start building up savings to draw on should rates rise.

hsbcarter_2

Thanks for your answer. Our house is worth £220k and we have a £155k mortgage. We're with First Active (part of RBS).

If the BOE base rate goes upto 4% we'll be ok, if it goes past 5.5% then I will need to go to Interest only. Hopefully that won't be for a good few years yet!

HSB

TrickyDicky

By then you may have remortgaged anyway.