Advice on interest only mortgages

jenwiggy

Hi can any one advise me on the subject of interest only mortgages.
I have an interest only mortgage but I don't currently have an endowment, what would be best trying to get a repayment mortgage or doing an endowment. Currently paying 750 a month for a 224,000 mortgage.

Any advice ?

Thanks

Gary123456790

Hi,

There will probably be lots of views on this, but my view is that it is best to move to a repayment mortgage.

This way the mortgage company can tell you exactly when the mortgage will be paid off. If you take out an endowment or other investment you wont know how it will perform and therefore wont know when it would pay the mortgage off.

You would also have lots of choices to make about types of investment, which company to go with, etc. With repayment there is none of this.

Its much simpler to just pay £x to the mortgage company for y months and know that at that date it'll be paid off.

It would depend on your circumstances but you could consider staying on interest only but making additional payments to the mortgage. This would then be just like being on repayment but you could stop making the additional payment at any time and be back to interest only again.

Some people have had trouble where they have switched to repayment and not been able to switch back to interest only later on. The downside is that this doesnt 'force' you to make the extra payment, which being on repayment would.

Gary.