Remortgaging and equity release

QQQ

I am due to do remortgage and I found it incredibly difficult to find an interest-only deal.

OK, I have to have repayment mortgage but I want everything I paid over two years back when I remortgage, leaving exactly 25% and not a penny more. But this seems to be difficult too. When I say to mortgage lenders that I need to do equity release, they say OK, you can just have a secured loan on top of your mortgage, and even at the same interest rate and the mortgage. But I suspect a catch here, they may probably change an interest rate or this loan will restrict my access to other loans etc. How can I just make a new lender accept 75% LTV mortgage and send the rest back straight into my current account without asking me what I need this cash for?

To those wondering why I want interest only mortgage: I believe more debt (at interest rate lower than real inflation) is better, provided this debt is an asset. And there is no much point in saving or repaying mortgage as government will print more money sooner or later, so let it burn its own money than the ones I earned.

bigadaj

Most lenders aren't interested in releasing equity, things have changed radically in the last few years.

Through a combination of fingers burnt, regulators policy and media attention then interest only isn't a good option for most lenders, remember they are businesses looking after their own interest, not yours. You will need a credible repayment vehicle in place, sale of the property won work so its investments such as isas, pension lump sum etc

Purpose of borrowing is also important to lenders now so this would need to be explained.

There's also a strong argument that despite your reasoning the value of your asset is in itself over valued, and much of that 25% equity could be wiped with a reasonable correction, without qe and near zero interest rates this may well have happened already. Interestingly how do you think the debt is a benefit, do you think you can invest a a higher return or another reason?

Short answer is its their money and if they don't like your reasoning or approach no one is obliged to lend you any money.

Thrugelmir

To those wondering why I want interest only mortgage: I believe more debt (at interest rate lower than real inflation) is better, provided this debt is an asset. And there is no much point in saving or repaying mortgage as government will print more money sooner or later, so let it burn its own money than the ones I earned.

Wage inflation is well below real inflation. So not like times of old when everything was booming. Debt is now very real.

QQQ

OK, can anyone reply on "how to" rather than "why"?

Thrugelmir wrote: »

Wage inflation is well below real inflation.

Is there any statistics about it? Preferably from non-goverment sources.

dimbo61

Well I have not had a pay rise in the last couple of years and inflation is what 2.8% at the moment.

_Andy_

"send the rest back straight into my current account without asking me what I need this cash for?"

Any lender will ask what it's for

zzzLazyDaisy

It is their money. They don't have to lend it to your on your terms, or at all, and indeed most won't. I suggest that you see a mortgage broker for advice.

QQQ

zzzLazyDaisy wrote: »

It is their money. They don't have to lend it to your on your terms, or at all, and indeed most won't. I suggest that you see a mortgage broker for advice.

Mortgage advisers did not help. I found the lenders who will do equity release myself.

_Andy_

I love how the OP is always so polite and thanks people who gives them advice in their threads.

Thrugelmir

QQQ wrote: »

Is there any statistics about it? Preferably from non-goverment sources.

Wage freezes in the public sector are public knowledge along with increased employee pension contributions.

zzzLazyDaisy

QQQ wrote: »

Mortgage advisers did not help. I found the lenders who will do equity release myself.

Okay, so the situation is that

• You spoke to mortgage advisers but they could not help you.
  
• So you found lenders who do equity release, but they refused to help you.
  
• So now you have come on an internet forum to ask how you can do this.

Is that a correct summary?