Remortgage from interest only

Siri_72

Hi,
Some help please…I have been on an interest only mortgage for some time and now need/want to start paying off the capital also. I do not have a lot of equity in the property but do have some savings which I could use to pay off some of the capital (not sure if I can??) in order to reduce the LTV% from a new lender to improve the rate. However as I presently have a 2.5% rate would I be better off staying put and investing any difference in some sort of 'endowment' instead?

HHarry

Siri,

It depends a bit on your savings level. If you've got enough to cover emergencies, then you could use your savings to pay off some of your existing mortgage. It's as easy as sending them a cheque!

Alternatively, if your rate is only 2.5% (which is pretty good) you could make your money work for you by putting it somewhere where you'll get a better interest rate. TSB will pay 5% on £2000 (and you can have 2 accounts), Nationwide 5% on £2.5k, and Lloyds 4% on £5k.

HH.

1312J

Just echoing what has been said above, a lot of it depends on your level of savings and also, what your LTV stands at, at present. Are you fixed at 2.5%, if you are and it is expiring soon, it may be worthwhile looking at other options.

Siri_72

Its lloyds std variable rate, I am unsure as to commit to a repayment plan or stick with the interest only and pay chunks off the capital when I can..?

Siri_72

…sorry C&G.
Help!?

amnblog

Check if you can overpay without penalty.

If you can, that is probably the most flexible way to do it.