1/2 interest, 1/2 repayment mortage

sd-apples

Hi all

Someone recently told me that you can get a mortgage that is 1/2 interest only 1/2 repayment?

We're currently on an interest only mortgage and don't think we could afford a full repayment mortgage but would like to start paying some off.

Can anyone advise where does these type of mortgages?

Thanks!

shortchanged_2

What is your plan for the end of the term of the mortgage?

sd-apples

What do you mean by that? I have to apologise I'm a bit of a mortgage novice. Current mortgage is in my husbands name and at time he took it out I wasn't involved.
If it's any help the mortgage is for 156K over about 25 years and at the minute is interest only and quite low payment due to the Bank of England base rate.

shortchanged_2

sd-apples wrote: »

What do you mean by that? I have to apologise I'm a bit of a mortgage novice. Current mortgage is in my husbands name and at time he took it out I wasn't involved.
If it's any help the mortgage is for 156K over about 25 years and at the minute is interest only and quite low payment due to the Bank of England base rate.

How are you planning to pay off the remaining capital at the end of the mortgage in 25 years or so?

sd-apples

We have no lump sum to pay it off at the end of the 25 years which is why I am am looking to start paying a bit off it now and when we can afford it in a few years time move to a full repayment mortgage?

Someone had mentioned to me that you can get a mortgage somewhere between an interest only mortgage and a full repayment one so just enquiring as to if this is possible and who offers them so I can find out more?

shortchanged_2

You really need to try to start paying off as much as you can sooner rather than later because it will only become relatively more expensive (i.e the monthly repayments will increase) the longer you put it off.

sd-apples

Yes in an ideal world this would be the best option however with planning on starting a family and with me being on maternity leave in a few months this is not visable right now. Hence why I am asking about is there an option inbetween the two. Do you or anyone else know if such a mortgage exists?

Gelly123

Hi sd-apples

Afraid I've got no advice to give but we are in a similar position in that we have an interest only mortgage at the moment and currently can't overpay but when our debt free date arrives middle of next year, we want to start paying larger amounts off each month.

In the meantime, we might be able to pay a "half-way" mortgage - part repayment/part interest only so here's hoping somebody comes along shortly with some great advice.

Good luck on your impending motherhood & maternity leave
Gelly
x

shortchanged_2

sd-apples wrote: »

Yes in an ideal world this would be the best option however with planning on starting a family and with me being on maternity leave in a few months this is not visable right now. Hence why I am asking about is there an option inbetween the two. Do you or anyone else know if such a mortgage exists?

Instead of going to a 1/2 repayment IO mortgage can you not just keep your existing mortgage, particularly as you said you are on a good rate and overpay the mortgage?

That is in essence the same thing but you need to try to be strict with yourself because the temptation may be there to not overpay from time to time.

Check the mortgage terms to see what you can overpay and try your best to pay the maximum you can afford.

shortchanged_2

Alternatively if you can get a better rate in savings such as an ISA than your mortgage rate you can pay into that and then pay off a lump sum from there on a regular basis.

sd-apples

thanks shortchanged. I didn't realise that you can overpay your mortgage.

That's also a good idea about having an ISA for saving the lump sum each month - less temptation not to pay. I hadn't thought about that either. I just assumed that if you were on an interest only you only paid the interest and had no other options.