Advice on Interest Only Mortgage

Leafy437

Hi, new to forum and after a little assistance on above please.

Presently I have a 72k, interest only mortgage on a flat worth 110k and I pay £289 a month. I've just retired and have a monthly gross income of £1,500 with a £80k gratuity. I want to reduce my monthly payments and would also like to pay off the mortgage over time but worried about using my lump sum and not having an nest egg for future emergencies and my ageing years. Any advice gratefully received.

anselld

Pay off the mortgage now before you get any other ideas to spend it on!
£8k is a decent emergency fund and £1500 is a reasonable retirement income if you are mortgage free.

getmore4less

£289pm is 4.8% ( why had you not looked a better deals?)

When is the term up and you have to pay it off?

if you could go to a 5 years plan your current payment would only support a £15k mortgage, might as well pay it off and start saving.

Thrugelmir

Settling the mortgage seems the best route. While interest rates are low currently. As and when they rise you will lose out. Which will negate the benefit that you might get now.

Leafy437

Term is up 1st Dec 2021 as it's a fifteen year, variable interest only mortgage.

Been onto Santander for different prices etc and found out I owe 73k and not 72k, !!!!!!... Lady said the amount has never changed but my old original Abbey mortgage (before they changed to Santander) was definitely 72k. I don't have anything from Santander as I've been abroad (British Forces) and only recently retired. While away my Brother lived in my flat and took care of it while I paid the mortgage. Wondering how to get to the bottom of it, any ideas?

Rollinghills

Maybe you added some fees on top of the price of the property when you took out the mortgage?

Leafy437

No extra fees added. Visited the bank this afternoon with paperwork from both Abbey (original mortgage) and Santander (managed to find Santander paperwork). The very helpful lady couldn't understand or explain it and has requested written confirmation from the mortgage department asking them to explain where the 73k came from.

An offset mortgage has now been mentioned but not sure how they work so I'm hopefully getting a visit next week by a free independent finacial adviser.

simpywimpy

The term of the mortgage is standard and you will be free to move to a better rate should you want to keep it. I doubt you are tied in. My parent had an IO mortgage with Abbey/santander. I have to say their mortgage dept were clueless when it came to settling it when they died so make sure you get things in writing.

Thrugelmir

Leafy437 wrote: »

Been onto Santander for different prices etc and found out I owe 73k and not 72k, !!!!!!...

Wondering how to get to the bottom of it, any ideas?

If you look at the annual mortgage statements you've been sent then should be very clear.