Interest only mortgage

stoddy2k01

Help...

I today asked my mortgage company if they would transfer my interest only mortgage to a repayment Mortgage.

After a 40 Min salary rundown of my in-comings and out-goings they said. Sorry but we cannot recommend putting you forward for a repayment mortgage.

when i asked them last month they said i would have to pay ex number of pounds per month over 14.05 yrs and the mortgage would be paid.

This would be beneficial to me as i have no endowment or any other form of income after the term of my current interest only mortgage. so the repayment would be the best option.

Can they refuse to change my mortgage.

I made a list of my in-comings and outgoings yet they perceived to ask about other things i pay for etc etc. which gave me the impression that they wanted me to stay on an interest only. but this is not a real option for me.

Can anyone help me or advise me.

flashg67

Sounds like either your circumstances have changed, or their criteria have changed and you're not 'their type' of customer at the moment?
You could look to remortgage elsewhere, or look at regular overpayments which will reduce the balance as a repayment mortgage would do.
Have you time left to invest a monthly amount to pay the mortgage off in 'x' years?

amnblog

They can stop you making changes if it does not meet affordability.

Is there anything to stop you overpaying on the mortgage to repay the capital.

stoddy2k01

Thanks.
I have approx 15 years left on the mortgage without any endowment or anything in place to clear the debt off at the end of the term iv'e paid the interest arrangement for 10 years but now feel that the only option is to change to a repayment; If i had the repayment option i would be able to clear the whole debt within the term remaining, But if i have to make over-payments based on the current term i would only have overpaid by £18.000. thus still owing £42000. So obviously the repayment option would be my best option. I do have an Iva in force and i have a loan in force. But i do feel that this is irrelevant to my circumstances. I can make the repayments on a repayment mortgage. I feel so cheesed off and feel all so tied to them. N,Rock that is. they said if i come back in perhaps 3 yrs they will reconsider; I just want to throw the keys back and say get stuffed. The reason was for refusal if interest rates were to rise to 7% within the next 3 years then i would not be able to repay the loan. Well surely either way if that was the case i'd be just as much a liability with an interest or re-payment mortgage. I'm just getting straight and want to get back on track and feel like iv'e been kicked in the guts. oh well.

scott_lithgows

If you overpay your mortgage every year,then they will reduce your payment at the yearly revue-continue to pay the higher amount to add even more to the over payment,also try for a fixed rate deal while rates are low.good luck.

stoddy2k01

Thanks Scott.
If i have an outstanding debt of £62000 on my 15 yr term interest only mortgage. and i'm currently paying £248.00 on my interest only mortgage then i pay another £200 per month taking it to £450 say for the 15 yr term do you know how much i would have remaining at the end of my current mortgage. Only if i got the chance to switch it would be all cleared. But with overpayments i'm under the impression i would have a lot still remaining at the end of the term as it currently is.

pm2326

I would use an online mortgage calculator to work out what your payments would be on repayment over the remaining term and current interest rate and pay that each month, you'd be paying it off at the same level without the need for the lenders approval...obviously if your rate changes you'll have to recalculate the payment needed

stoddy2k01

I don't know how to use these calculators do you have any ideas based on my previous post. i'd be grateful.

stoddy2k01

pm2326 wrote: »

I would use an online mortgage calculator to work out what your payments would be on repayment over the remaining term and current interest rate and pay that each month, you'd be paying it off at the same level without the need for the lenders approval...obviously if your rate changes you'll have to recalculate the payment needed

Thanks Pm.
I think i understand it now. i used an online calculator and basically if i pay the extra £235 per month for the remainder of my term i think i will have paid it off. Or that's how i read it.

Regards
Stoddy.

stoddy2k01

pm2326 wrote: »

I would use an online mortgage calculator to work out what your payments would be on repayment over the remaining term and current interest rate and pay that each month, you'd be paying it off at the same level without the need for the lenders approval...obviously if your rate changes you'll have to recalculate the payment needed

Thanks Pm .
I think i understand it now. i used an online calculator and basically if i pay the extra £235 per month for the remainder of my term i think i will have paid it off. Or that's how i read it.

Regards
Stoddy.

Imma_Number

From the figures you've provided £235 looks ok.
Also as the balance reduces future interest rates rises have less of an impact.

As Pm says you *must* remember to recalculate when the interest rate changes though.