Changing to interest only?

abitrubbish

Hi there,

We currently have a mortgage on a second home. We have decided we can no longer afford to keep the house and will be looking to sell it within a year or so, when we have completed some work on it.

The mortgage is currently a long term tracker with A&L at 6.24% at the moment I think, which isn't too bad. I don't think it would be possible to remortgage to something better without either paying large fees or tying ourselves in for at least 2 years, which will be a problem as we are looking to sell before that.

So I was wondering if it would be worth asking to change to interest only on our current deal. This would reduce our monthly payments which would make our lives far easier in the short term, allowing us to pay off expensive overdrafts etc. As we are selling the house anyway, we will not need to worry about repaying the capital.

Is it likely that A&L would agree to this do you think? Is there any obvious reason not to do it that I have missed?

Thanks!

kingkano

ING have a no fees and no tie rate thats much better... unless you have penalties tied to your current deal?

With regards IO. Some lenders are now asking for documented evidence of an 'investment vehicle' to repay the loan at the end of the interest only period.... so they may not allow you unless you can show this. Some will do it no problem (esp as its a second house?). Only way to find out is to ring and ask them!

abitrubbish

Thanks - I obviously haven't shopped round very hard!

The ING deal looks like it might be ideal - I shall have to have a closer look at this.

In fact with the ING rate on an interest only basis we might not have to sell the house at all, it would be very much more affordable!

Thanks again!