Mortgage product ends next year when I'll be 60

greenball

Hi everyone.I'm a newbie to this great site withn2 posts in a day,)

My mortgage is with Nationwide ,and is interest only.The product I have expires next April.
My property is worth approx £200,000, and the mortgage is for £70,000. Question is, will Nationwide demand the full sum next year?
Or will I be allowed to continue until I am 65 , when I intend to
Sell and repay the full amount then ?

Please could somebody advise ?

Thank you

Thrugelmir

The mortgage is contractually due to end next year. So in answer to your question, the NW are within their legal rights to demand repayment of the money.

The issue you face is that you need to extend your mortgage. On what terms is another matter, as the NW hold all the cards.

What plans do you have for repaying the capital?

greenball

Thanks for swift response Thrugelmir. What intend to do, is sell in 5 years time, and give them the full amount then. As I have been with NW for 4 years , and not missed a payment, do you think that they could be lenient
and Continue with the plan for another 5 years . This of course , gives them more money on top of the full amount eventually

Thrugelmir

Suggest you speak to them now. As not a question of leniency. Your current mortgage ends next year. I suspect that the NW will therefore require you to apply for a new mortgage product that be based on current lending criteria.

If selling is the plan. Perhaps consider doing so now. House prices may have peaked and may well even fall in the medium term.

JPB123

Does the product expire next year? Or the mortgage term?

If it's just the product, then you'll roll onto the SVR if you don't choose a new product.

I am an Independent Mortgage Adviser

You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice

Gentoo365

EDIT - I am assuming that your mortgage term expires. Not just the fixed rate period.

They cannot just extend it. The term expires so you either have to remortgage, or sell and pay them back.

If you do not repay them the notional amount then they can repossess the property.

It seems you want a 5 year interest only mortgage to be repaid by the sale of the property. You may want to ask Nationwide if they offer such a product and ask for a KFI to see the terms.

You may also want to contact a broker to see if there are any alternative providers.

A word of warning. The FSA are becoming very strict on interest only mortgages. Many people are coming up to the repayment date with no ability, nor plan to repay the loan. Some of these people will possibly claim they were mis-sold, some will claim that the bank is being unreasonable.

So any future interest only mortgage must have a clear repayment vehicle in place, and it must be considered suitable.

'Sale of property' is unlikely to be suitable if it is your only residential property. Unless of course your equity is high and you have a clear ability to downsize.

I suggest you start the process now, and consider a contingency plan should you be unable to remortgage and are forced to sell.