New EU ruling - Interest only mortgage

Lololo

Hi,
I wander whether anyone can shed any light on the new EU ruling that is coming in in September 2015 / March 2016. As we have an interest only mortgage, from what I can tell remortgaging with our current lender won't be a problem if we make no changes to the mortgage ie term, address, loan amount etc. So we should be able to transfer to a new deal as we are about to online with no re- applying and stringent affordability tests. Hope so has have just taken a 2 year fix rather than pay extra on a 5 year fix in order to add the savings of that additional cost to our over payments we are working hard to pay.

My question really is that we planned to over pay on our interest only mortgage until it came to a sensible amount to switch to a repayment for the remainder of the term. However can someone please tell me whether changing to a repayment from a interest only in the future will mean we will have to be reassessed also?
Many thanks in advance.

kingstreet

The Mortgage Market Review introduced in April 2014 means you have to be affordability checked for an interest-only to repayment switch now, never mind when the MCD is introduced in March 2016.

A customer retention product from your existing lender is not a remortgage, so this is unaffected be either.

dunstonh

, from what I can tell remortgaging with our current lender won't be a problem

Depends on what you mean by remortgaging. Buying a new deal with the existing lender is not a remortgage and does not need a new assessment. Remortgaging to another lender would. As would changing the term of the mortgage.

Lenders do have the right to switch you to repayment basis if they feel you do not have satisfactory repayment plans in place. Although it rarely happens.

edit: Kingstreet beat me to it. Didnt realise I was on the phone that long before starting post and completing it!

kingstreet

I hate it when that happens!