Interest only ends when I am 65

paulo100

Malcnascar
I haven't spoken to them yet and probably won't for some time yet, I have 3.5 years on low interest only payment that they can't get out of.

Somethingcorporate explains why I would like to stay very succinctly

Thrugelmir if you are on the same deal I am on they can't change the terms. They are locked into charging me 1% over base for the duration.

Thrugelmir

paulo100 wrote: »

Thrugelmir if you are on the same deal I am on they can't change the terms. They are locked into charging me 1% over base for the duration.

My small BS charges me .35% above BOE base.

Yes they can change terms. In summary. Every mortgage contract has an exceptional services clause. By law all Building Soceties have to be run on a solvent basis. So the Directors have a personal duty of responsibilty and care. Should the lender cbecome unprofitable ( Skipton BS being an example). Then the interest rate could be lifted. The FSA would rubber stamp the exercise.

My BS made a profit of £78k on £112 million of lending in 2011.

Margins are thinner than people imagine. FSA levies account for .25% alone. As the Icelandic bailout still has to paid for.

noddynoo

You say you couldn't repay without selling your home yet in the next breath say you could pay it now

holly_hobby

Hi Paulo,

An authorised equity release adviser would be able to assess your circs, the impact any eq release exercise would have for example on any MT benefits, whist discussing the provider in question (if appropriate).

I can't stress enough though, that LERMs are not for short term finance (even if the debt is ring fenced) and suit a particular client with a particular set of needs (and you certainly won't attract the same deal you are currently enjoying) - which is why I would direct you to an adviser in this siutation.

I will say though that the max LTV for the type of scheme you're interest in, and at the relatively young age of 65 (in LERM terms !), would be just 29% LTV - with an interest rate in excess of 6% ....

So you can see why this would really be a last chance saloon option (even if your property value is sufficient for the noted max LTV) ... and given what you have said regarding your bouyant(?) finances, I don't believe on the face of things it this will be an appropriate solution at all.

(NB - although qualified to do so, please do not take this, or any post, as any form of equity release advice, it is intended for general discussion only)

Hope this helps

Holly

Thrugelmir

Malcnascar wrote: »

I must be having a moment of total thickness. Your mortgage ends when you are 65. You asked if NW would extend beyond 65. I repeat my advice go and ring them. Or have you changed your question?

Policy will have changed in 3 plus years.

paulo100

Holly Hobby
Thanks, very informative response, you are very kind to go to such trouble answering my questions
Noddynoo
You are right to point this out, what I should have said in my original post is that I don't want to use savings that I have available to pay off the mortgage at this time. I have other uses for it, plus, as has been pointed out by others, I am earning interest on it which is well in excess of the small amount of interest I am paying on the mortgage. With interest rates set to stay low for a number of years ahead it makes sense to stay with the mortgage.
Thrugelmir
I have read my mortgage documents in great detail (as you might imagine) and my interest rate is fixed for the duration of the mortgage at 1% over bank base rate. The Nationwide made circa £236 million in 2011 so they are not struggling. No scope for pleading poverty, and thus breaking contracts there.

Thrugelmir

paulo100 wrote: »

Thrugelmir
I have read my mortgage documents in great detail (as you might imagine) and my interest rate is fixed for the duration of the mortgage at 1% over bank base rate. The Nationwide made circa £236 million in 2011 so they are not struggling. No scope for pleading poverty, and thus breaking contracts there.

Total lending £149,417,000 million.

So £236 million equates to a 0.157% net return.

Doesn't make £236 million look so good. Particularly if borrowing costs were to rise in order to fund your mortgage.

You may be interested to know that LloydsHBOS puts its average cost of funding its entire mortgage book at 2.85%.

opinions4u

paulo100 wrote: »

I have read my mortgage documents in great detail (as you might imagine) and my interest rate is fixed for the duration of the mortgage at 1% over bank base rate. The Nationwide made circa £236 million in 2011 so they are not struggling. No scope for pleading poverty, and thus breaking contracts there.

But the "duration" expires in 3 years or so. At which point, even if they agree to some sort of term extension, they can dictate new terms.

paulo100

opinions4u wrote: »

But the "duration" expires in 3 years or so. At which point, even if they agree to some sort of term extension, they can dictate new terms.

Uh yes, of course they can, which brings us neatly full circle to my original post, which was 'does anyone.... Oh forget it

Thrugelmir

paulo100 wrote: »

Uh yes, of course they can, which brings us neatly full circle to my original post, which was 'does anyone.... Oh forget it

Come back in 36 months.