Interest only mortgage?

adethfc

Hi all im hoping for some advice please.

My partner and I are separating and will need to sell our current home.

I will be renting elsewhere whilst my partner will be staying at current home for a year.

we have a mortgage of 132,000 (24 years) the current house value is 161,000. we are currently on a 5.89% rate with no ERC paying £700 a month.

As we are able to remortgage is it worth taking out a interest only mortgage (over 2 years) to drastically cut the monthly bill down as the house will be sold in 1 year anyway? this is to allow my partner and i to realign our finances and customize to new circumstances.

putting the house on the market before this time next year is not an option for us.

any advice given will be greatly appreciated

Thrugelmir

By realigning your finances. Do you mean repaying other debts?

adethfc

Thrugelmir wrote: »

By realigning your finances. Do you mean repaying other debts?

Not other debts as such, as they will be cleared when the house is sold, (our total other debts are around 8k) its more cutting our costs of living until we can put the house on the market next year.

adethfc

Also my current rate is actually 3.94% not 5.89%

notanewuser

You'll potentially have a hefty early repayment charge to pay if you sell one year into a 2 year fixed rate.

Thrugelmir

To switch to an interest only basis you'll most likely be required to have a repayment vehicle in place. So I won't rely on this avenue. Suggest you ring your lender to confirm the position.

_Andy_

Nearly guaranteed not to be approved without a repayment vehicle (which would negate the point of what you want to do)