Selling House Interest-only Mortgage

Angelhoney

Hi
I'm planning to sell my flat next summer but I'm not sure how it all works with an interest-only mortgage. (I will have about 10 years of the term remaining when I sell). I got a mortgage for 28781 pounds which if I understand correctly is the captial amount I have to repay to the building society when I sell? Do I simply pay this amount to them from the money I get selling the house? The flat has gone up in value by quite a lot in the last ten years so I assume I will be able to pay them back easily:).... I also have a saving scheme in place but I understood that this was to be used at the end of the term to pay off the capital and then the property would be mine but what happens if I am selling before the end of the term? What happens to this money? :A Any guidance would be much appreciated....

Cornucopia

Essentially, yes, that's all correct.

In more detail: your amount outstanding at the bank will normally be exactly what you originally borrowed. This will be automatically repaid by your solicitor at the point of completion. If you are not buying anywhere else, your solicitor will forward any remaining funds to you.

You should be in a position well before completion to know whether your sale proceeds will comfortably repay your mortgage - this will be based on your agreed selling price.

If you have a separate savings scheme, this will normally carry on, unless you take action to close it. The funds within it are yours.

Goldiegirl

Just to clarify, it probably don't be exactly the same amount as the original mortgage, there could be variations due to any fees being charged, the date in the month you repay the mortgage in full, and rounding up and down of odd pence in calculations.

But it'll be a similar amount to what you originally borrowed.