Interest only mortgage - current lender won't give me a new deal and can't remortgage

johndylan

Just read your post and i am in a similar situation. Santander threw money at me in the 1990's and 2000's. We borrowed £50K to build an extension, renovate, new garage etc 8 years ago. Currently on an interest only mortgage. When i phoned last week to go on a new deal, 22 years on repayment, they said not an option??? I was alarmed. Never missed a payment in 17 years, said my house was 20k in value lower than the mortgage! Turns out they didn't even bother to re-value my property and was still listed as a 3 bedroom, whereas it is now 5 bedrooms, with two drives, large garage etc. Santander have been irresponsible and should be held to account. They sent out a valuer yesterday and i am awaiting their valuation. I want to pay off my mortgage and these ...........( words cant describe how i feel) may not give me this option. i am livid. if they refuse because of affordability because of loans that we have we will not be offered repayment and so when the current deal ends in 8 years we will have to sell to setttle the debt.

johndylan

Words of wisdom from the wise on here, but i was in my early 20's at the time. The "ticking time bomb" will explode in a few years and then we will see a real crisis! it is estimated i believe that there are at least 3 million homeowners on interest only. When they come to change after 2014 with even stricter lending guidelines the .... will hit the fan.

jonesMUFCforever

OP What rate are you on now?
What is the current SVR from Santander?

How much extra per month can you overpay to at least try to reduce the capital?

Eonel

There are many different angles on this. Personally, I found myself locked out of the property market to buy a nice house as I was not prepared to take the risk of borrowing 6 times joint salary on an interest only basis.

However enough people did it to inflate house prices so far that the massive Northern Rock type deals became effectively the only way to buy a nice house. This does not put me in a naturally sympathetic position when the risks that those people took materialise.

OP should also be aware that 4.99% is still below the average long term mortgage rate and should be prepared for rates to be 7% or 8% in the longer term.

opinions4u

Ignoring the fact that these posts are on the wrong part of the forum ...

1) Santander will let you switch to a repayment mortgage. This is not conditional on changing mortgage product.

2) They are not obliged to offer you any rate other than the rate they said they'd offer you in their mortgage offer. Typically this means their SVR once an initial fix or discount has expired.

_Andy_

This kind of post really winds me up. Blaming the lender for their own bad financial decisions. It's quite offensive to be honest.

No lender is obliged to offer new rates. They've put you on the SVR which you agreed to when you took the mortgage out.

Re changing to repayment, someone's got their wires crossed. Ring them back, changing to it shouldn't be an issue.

But please stop moaning about the lender.

kloana

_Andy_ wrote: »

They've put you on the SVR which you agreed to when you took the mortgage out.

You mean you actually expect borrowers to read and understand the longer-term implications of their credit agreements, rate changes, and so on? Come on now

_Andy_

kloana wrote: »

You mean you actually expect borrowers to read and understand the longer-term implications of their credit agreements, rate changes, and so on? Come on now

Dammit, good point. I retract my previous statement.

Horseunderwater

Oh dear Oh Dear - what a sad situation. The one thing you should be is savvy when it comes to signing up for any loan Credit card or mortgage - there is no excuse. But one cannot bolt stable door after horse has run out the gate as me old Dad used to say.
Santander SVR as far as I know is 4.74% unless someone knows something I don't.
You can certainly go back to repayment anytime you wish - definitely not dependent on new deal. Get that done first before anything else. Then negotiate a lower interest rate with same mortgage - you do not need a new deal to do this. I am about to that very thing next May.
Santander have been very helpful about that very thing when I have recently spoken to them. Perhaps you need to ring the arrears dept as that is who I spoke to.

dalesrider

hoggiebear wrote: »

then the advisor asked about how we intended to repay the capital at the end of the term. I was not financially savvy with mortgages at the time and I vaguely mentioned that we had shares and some savings?

It is stuff like this quote that seriously worries me....

You are borrowing on interest only. Yet you have no plan as to how to pay the debt back once the term is up......

I think there is a whole new crisis being stoked up by people in the situation.

Endowments on interest only loans meant banks etc, having to stump up compensation when the markets went west. So stopped selling the ins to cover a mortgage payback.

Within your original interest only app, will have been that you have to have in place a means to pay it back.

Yet I once again fear that banks will end up stumping up compensation because people have failed to put in place the means to pay the mortgage back when the term is up.