what happens when my interest only fised period ends

Mr_Incredible

I have an interest only mortgage, I make overpayments but enjoy that I'm only contracted to pay interest, its less stressful if I have a tight month.

My question is, when the fixed rate period ends on 18 months it will revert to a standard variable rate.

I could then do another fixed rate interest only with the same provider but CAN I go to anothe lender and get another fixed rate or will there only be capital repayments offered by other lenders?

John1993_2

It's going to depend on what arrangements you've made to pay off the capital. What are your plans in this respect?

Mr_Incredible

well for example I paid off £10k yesterday, I just pay as and when I feel like on my current mortgage.

When the fixed period ends I can stick with my current lender on interest only. My question is whether I can shop around or whether they will only offer capital and repayment

_Andy_

If your repayment vehicle is overpaying, I doubt very much that you'll find any other lender willing to offer anything.

Mr_Incredible

even where I have a history of making overpayments so effectively paying it down?

Dave_Ham

Absolutely, consistent overpayment is not an acceptable interest only repayment vehicle for any lender out there.

Subject to loan to value, you may have other options.

Your existing lender may also offer you retention products to tie you into a new deal on interest only, so worth asking the question and may be better than the SVR - depending upon lender of course.

John1993_2

Mr_Incredible wrote: »

well for example I paid off £10k yesterday, I just pay as and when I feel like on my current mortgage.

So your stated plan is "Oh, I'll just pay it of as and when iit suits"?

I suspect that this isn't going to encourage anyone to lend. Hopefully you'll not be so vague when you are being asked the same question by actual lenders. You do understand, don't you, that they'll actually need to see an investment or a business plan or the like that shows that they'll get the principal back with a high degree of certainty? An offhand "Oh, I'm fine, you'll get it back no problem" won't impress.

Mr_Incredible

John1993 wrote: »

So your stated plan is "Oh, I'll just pay it of as and when iit suits"?

I suspect that this isn't going to encourage anyone to lend. Hopefully you'll not be so vague when you are being asked the same question by actual lenders. You do understand, don't you, that they'll actually need to see an investment or a business plan or the like that shows that they'll get the principal back with a high degree of certainty? An offhand "Oh, I'm fine, you'll get it back no problem" won't impress.

Yeah thanks John, take the stick out your !!! would ya:eek:

In the past you would just say 'I'm making provisions' and that would be anough, I understand times are changing and even though it looks like house prices are moving again, banks, pressured by FSA are asking more questions.

I suppose I would have said "please take a look at my over payment history for proof of my intentions going forwards" I just like the flexibility of interest only. Ultimately if they say no, then I'll just get the most competitive repayment deal I can out there, HSBC's 1.49% looks pretty darn attractive! its not till 18 months away anyway, who knows what the market will be doing its certainly capable of change

_Andy_

HSBC will not take that as a repayment method and never have

Thrugelmir

Mr_Incredible wrote: »

banks, pressured by FSA are asking more questions.

Mainstream lenders have been ahead of the FCA (previously the FSA) in this regard. The FCA has is making regulation mandatory.

From a lenders point of view Mortgage lending is not priced to deal with delinquent borrowers when the end of the mortgage term is reached.

Mr_Incredible

It turns out my existing lender is fine with it and has offered me and improved rate fixed rate less than half way through my existing fixed term tracker, and have agreed to keep me on on nterest only.

If you don't ask/try you dont get people!

Ignore the negativity and give it a go, you'll be suprised what you can achieve!