Interest only mortgages still available...

Alan_Cross

Don't I remember hearing that these were now virtually extinct? And yet, doing a comparison site search just now out of sheer interest, up come a couple of dozen results. HSBC to Barclays to TSB to you-name-it.

Has my understanding been really so way off, then?

dj1471

They're still available but you have to demonstrate that you have a plausible plan for paying off the capital at the end of the term, making them much harder to get.

Alan_Cross

dj1471 wrote: »

They're still available but you have to demonstrate that you have a plausible plan for paying off the capital at the end of the term, making them much harder to get.

What would normally be accepted, then?

Thrugelmir

Alan_Cross wrote: »

What would normally be accepted, then?

What's your plan?

ACG

Their are certain conditions the mortgage will normally need to meet.

Heres an example I received last week from virgin money:

• [FONT=&quot]Minimum property value of £500,000[/FONT]
• [FONT=&quot]Maximum LTV of 70%[/FONT][FONT=&quot][/FONT]
• [FONT=&quot]Applicants must have a combined minimum gross income of £100,000 (including 100% of additional income such as bonuses and overtime)[/FONT]

Funny_old_game

From reading your posts from earlier in the year. You are mature borrowers looking for about £60k with pension affordability looking ok.

However that was pre MMR the criteria for int only for some lenders I've read is £1m pension fund at point of sale.

You seem to not want repayment but seem to have no choice if looking to change providers.

Alan_Cross

Funny_old_game wrote: »

From reading your posts from earlier in the year. You are mature borrowers looking for about £60k with pension affordability looking ok.

However that was pre MMR the criteria for int only for some lenders I've read is £1m pension fund at point of sale.

You seem to not want repayment but seem to have no choice if looking to change providers.

Indeed. As mentioned, I had thought that finding another lender on an interest only basis for a couple of years (which would be the ideal) was totally ruled out. This is all the breathing space we'd need and will then be able to pay off in full.

£1m pension funds are pie in the sky. It seems to come down to our current lender's inflexible age rules.

Thrugelmir

Alan_Cross wrote: »

It seems to come down to our current lender's inflexible age rules.

As a business the lender is within their right to set whatever rules they wish. Mortgage lending is too low margin to warrant huge amounts of flexibility.

Alan_Cross

Thrugelmir wrote: »

As a business the lender is within their right to set whatever rules they wish. Mortgage lending is too low margin to warrant huge amounts of flexibility.

That much I realise. I was simply interested to know whether, at our ages, we could still take out a two year fix with another lender on IO basis. A re-mortgage, in other words.

kingstreet

If you want to remortgage, you need to match your requirements to what is available in the marketplace. You either research that yourself, or appoint a broker to do this on your behalf.

You need to have a credible repayment plan in place, based on the lender's requirements. Interest-only with no repayment vehicle is no longer available.

HappyMJ

Alan_Cross wrote: »

That much I realise. I was simply interested to know whether, at our ages, we could still take out a two year fix with another lender on IO basis. A re-mortgage, in other words.

It is possible with a good repayment offer in place. You really need the help of a broker.

If that doesn't work then take a much bigger mortgage than you would otherwise need and go onto a repayment mortgage over as long a period as you can. Invest the excess you didn't really need in the first place and use the money that generates to pay the mortgage in smaller payments. It'll cost a little extra overall but if you can figure it out then it might be an option. You cannot be tempted ever to spend the money released as it's only to be used for paying down the mortgage so you must be disciplined and financially comfortable anyway.