Interest only deals all gone ?

michaels

I have just got an IO from Santander although I think they will only allow IO on the first 50% of borrowings and anyhtign above 50% would have to be repayment. They also accept downsizing as a suitable repayment vehicle or a regualar investment product but not a cash isa, a pension lump sum or other property.

amnblog

Yes it is true that interest only options on residential deals are rarer in todays market.

With the right lender you can still get interest only up to 75% loan to value. There is even one that will do 80% interest only for three years.

joshua102

michaels wrote: »

I have just got an IO from Santander although I think they will only allow IO on the first 50% of borrowings and anyhtign above 50% would have to be repayment. They also accept downsizing as a suitable repayment vehicle or a regualar investment product but not a cash isa, a pension lump sum or other property.

This could be my best option as my interest only is already with Santander so the risk of me having 50% interest only is less than my current 100% interest only I think

joshua102

amnblog wrote: »

Yes it is true that interest only options on residential deals are rarer in todays market.

With the right lender you can still get interest only up to 75% loan to value. There is even one that will do 80% interest only for three years.

Like I said previously yes there are loads till you try apply and was told by 2 different mortgage advisors with the loan size and equity I have no chance ?
Want to borrow £112000 on a £175000 property

comeandgo

Are you still counting 65 as retirement age? You wont get your state pension until you are 67 at the very earliest.

joshua102

Perelandra wrote: »

I think HSBC (and by extension First Direct) still offer interest-only mortgages, for those with higher equity percentages.

Just looked at HSBC and you have to hold a premier account with 50k savings or pay in 100k a year unless I read it wrong

joshua102

comeandgo wrote: »

Are you still counting 65 as retirement age? You wont get your state pension until you are 67 at the very earliest.

That is true but when I type in longer than 65 they ask for how I am gonna pay after retirement :-)

_Andy_

joshua102 wrote: »

Just looked at HSBC and you have to hold a premier account with 50k savings or pay in 100k a year unless I read it wrong

You will need a repayment vehicle other than sale of property

Perelandra

joshua102 wrote: »

Just looked at HSBC and you have to hold a premier account with 50k savings or pay in 100k a year unless I read it wrong

I think you read that wrong. Some options require different account types- not all need the premier account. The "better" the current account you have with them, the lower the rate.

amnblog

Interest only options today are not an excuse to not pay the going rate for a capital repayment mortgage.

In the old days interest only deals were supported by endowment policies and due to high levels of inflation the endowment arrangement looked a better bet than the repayment option at the point of sale.

Interest only mortgages without any investment type repayment vehicle are a relatively new idea which sprang up when endowments fell out of favour and property prices were running riot.

Some lenders will consider sale of the mortgage property as a method of capital repayment but only where the householder have sufficient equity to be able to sensibly downscale.

For example we are doing one at the moment for £150,000 on £750,000 value.

Sale of property as a repayment vehicle for £112,000 mortgage on £175,000 value is not one that a lender or a broker can expect to hold water with the regulator.