Will Interest Only be pulled from existing customers?

Mr_Incredible

Hearing alot about IO mortgages being pulled.

I have mine with Nationwide and I do make over payments but I like the flexibility of IO as I'm not compelled to make repayments.

The value of my house is going up and I am making payments off the capital borrowed, just not every month.

when it comes round for renewal, will I be allowed to stay on IO?

ACG

You would need to speak to nationwide at the time.

Lenders are trying to get people onto repayment, even if it is only part repayment/part interest only. If you can evidence you have a savings plan (ISA/Endowment/Shares/Pension etc) then that may help to keep it on I/O but each lender seems to take their own stance on it and it can change over time.

Mr_Incredible

OK thanks, I'm under 50% LTV, make over payments as and when and we jointly earn over £100k.

Sounds like I should open an ISA before the fixed period runs out then

Funny_old_game

Opening an ISA now is useless. The amount on II will need to be backed up with same funds or more in an ISA.

Regular overpayments will not be good enough for a new lender and will be declined the IO method.

amnblog

Mr_Incredible wrote: »

Hearing alot about IO mortgages being pulled.

From where?

TrickyDicky101

You have a contractual agreement with your lender for an interest only product until the contractual maturity is reached. The lender cannot force you to move to repayment. This is different from whether the lender will be prepared to offer you a new mortgage product e.g. with a fixed rate for 2 or 5 years say at the expiration of your existing product.

Thrugelmir

Mr_Incredible wrote: »

Hearing alot about IO mortgages being pulled.

They may have been pulled from the new lending market. However existing mortgages will continue to run as before. Lenders are writing to borrowers at the behest of the FCA. The purpose of writing is to wake people up to the fact that the debt has to be repaid. On the whole it is working with many people switching there mortgages onto a repayment basis. The inherent danger is that some people will leave it far too late to tackle the capital owed. Rising interest rates will squeeze many households incomes making capital repayments harder to make.

Mr_Incredible

Apart from BtL mortgages, I know of nationwide and santander that offer interest only mortgages to regular home owning occupiers, does anyone know of any others and what their rates are at 60% LTV

betmunch

Nationwide don't offer interest only mortgages and haven't done for a long time.

lonestarfan

Mr_Incredible wrote: »

Hearing alot about IO mortgages being pulled.

I have mine with Nationwide and I do make over payments but I like the flexibility of IO as I'm not compelled to make repayments.

The value of my house is going up and I am making payments off the capital borrowed, just not every month.

when it comes round for renewal, will I be allowed to stay on IO?

What do you mean "when it comes round for renewal"? Do you mean you have a mortgage product with Nationwide that has an end date to it?
If so then you will have to see what products they will offer you to retain you or remortgage elsewhere. Not sure many places do IO but you can view it in their lending criteria. Santander was 50% for my family member who is an existing borrower wanting a new product and any further borrowing above 50% had to be on a repayment basis. They gave a better rate when brought down to 50% LTV by paying a small capital repayment to it.

amnblog

LTV is not the only consideration for new borrowers seeking interest only.