nterest only repayment vehicle advice needed please

majormax

looking at taking interest only for 12 months and would like advice on best type of repayment vehicle to take out to satisfy bank's requirements. £58,000 over 17 years. any idea how mUch I would need to pay each month in order to cover that? Thanks very much everyone.

dunstonh

The monthly cost of a repayment vehicle will typically be more than sticking on a repayment mortgage. Something in the region of £200pm depending on how you set it up would be required.

majormax

Thanks very much! Just would like to pay my credit card and overdraft off in this 12 month period and hoped an interest only would enable me to do that, but they want repayment vehicle and won't accept my pension, as there isn't a "final run out date". it is in payment until death urand of course if that were to happen before mortgage was finished, my life insurance would pay out, so I am a bit confused as to why they won't accept the pension?! I only want to do this for 12 months and then revert to repayment anyway.

poppy10_2

majormax wrote: »

I am a bit confused as to why they won't accept the pension?!

If you use the pension, what will you live on when you retire?

opinions4u

So basically you want to borrow on your mortgage (the reduction in payment is nothing more than a loan).

Then you want to repay this debt over 17 years?

Personally I think it's a bit silly. Get over to Debt-Free Wannabe and get them to help you find ways of improving your budgeting. Your current plan is robbing Peter to pay Paul.

blueberrypie

majormax wrote: »

Thanks very much! Just would like to pay my credit card and overdraft off in this 12 month period and hoped an interest only would enable me to do that, but they want repayment vehicle and won't accept my pension, as there isn't a "final run out date". it is in payment until death urand of course if that were to happen before mortgage was finished, my life insurance would pay out, so I am a bit confused as to why they won't accept the pension?!

I think you're confused about what a repayment vehicle is. It's not the same as the continued ability to pay the mortgage. The lender wants something that will provide a lump sum that will pay off the mortgage by a particular date. You're looking at being able to keep the mortgage running for as long as you want, possibly until you die. They are two completely different ideas, which is why your pension doesn't qualify as a repayment vehicle.

sjoh1013

I want an interest only mortgage so I can pay off more capital each month and pay off my mortgage more quickly.
Can anyone tell me - What do I have to do to get an interest only mortgage and a repayment vehicle? I last had a meeting with Alliance and Leicester about this last year, and they were extremely hostile to me for no good reason, and did not tell me what repayment vehicles were acceptable. For what reason do companies offer interest only mortgages? Please, could someone who has got one tell me what they said to their mortgage company that allowed them to take one out?
Grateful thanks!!

shortchanged_2

sjoh1013 wrote: »

I want an interest only mortgage so I can pay off more capital each month and pay off my mortgage more quickly.
Can anyone tell me - What do I have to do to get an interest only mortgage and a repayment vehicle? I last had a meeting with Alliance and Leicester about this last year, and they were extremely hostile to me for no good reason, and did not tell me what repayment vehicles were acceptable. For what reason do companies offer interest only mortgages? Please, could someone who has got one tell me what they said to their mortgage company that allowed them to take one out?
Grateful thanks!!

Why don't you just have a repayment mortgage and overpay?

_Andy_

sjoh1013 wrote: »

I want an interest only mortgage so I can pay off more capital each month and pay off my mortgage more quickly.

Well then just get a capital repayment mortgage and overpay

blueberrypie

sjoh1013 wrote: »

I want an interest only mortgage so I can pay off more capital each month and pay off my mortgage more quickly.

I'm not sure why you think having an interest-only mortgage would make it possible for you to pay off your mortgage more quickly. The only thing that makes a difference to how quickly you pay off your mortgage is how much you repay. If you want to pay off your mortgage as quickly as possible, look for a mortgage with a shorter term and/or no overpayment penalties, and then pay as much as you can afford each month.

dunstonh

want an interest only mortgage so I can pay off more capital each month and pay off my mortgage more quickly.

Having an interest only mortgage doesnt change the amount you can overpay compared to a repayment mortgage.

What you are suggesting is counter productive. You dont change to interest only to pay more back. You just set up an overpayment on the repayment mortgage.