Nationwide Switching to Interest Only

alexbellamy

Hello all

I currently have a £120k mortgage with Nationwide - £85k is on the BMR of 2.5% and the rest is on a fixed rate deal.

I would like to switch the main mortgage amount to interest only and repay using a pension lump sum in when I retire. I will also take out an ISA savings plan and repay the capital where I can.

Does anyone know if it is possible to switch from BMR repayment to interest only without losing the BMR rate and moving to SMR / other fixed term deals?

Also, how much evidence of repayment vehicle do Nationwide require?

Cheers
Alex

cashandassetpoor

They wont need evidence for most repayment vehicles but there is a £20 fee which will be added to hour main loan and will attract interest. To counteract this you could make a £20 overpayment as long as you don't already overpay to the maximum amount of £500 each month.

Thrugelmir

From the NW website.

Important information for interest only or part and part mortgages:

You can choose to have part repayment and part interest only for your mortgage.

If you're happy to accept the risk with an interest only, or part and part deal, we can offer you a mortgage with these methods provided that:

you have a suitable repayment plan, such as an ISA or an endowment policy or
are prepared to sell your house at the end of the mortgage term to repay the debt. If this is the case, you will need to have at least £150,000 equity in your existing property and we will only lend you 66% of the property value or
You intend to sell a second property to repay the loan. The equity in the second property must be at least 120% of the new mortgage amount it is intended to cover.
Please note that if there are insufficient funds from these repayment methods to repay your mortgage you will have to find an alternative means of repaying the shortfall.