Extending the term

phidon

We have an interest only mortgage with Santander which was taken out in 2007 and the interest paymenmts have always been paid on time and in full. The loan to value is 37% so there is loads of equity as the property is valued at £950,000+.

The current term end on the mortgage is October 2018 when the capital is due to be re-paid which we planned to do with the sale proceeds and downsize.

I spoke to Santander today and was told that their 'Policy' currently on interest only loans is that the term cannot be extended for any reason. Her only advice was to check regularly because the policy changes from time to time but also that there is something called the Interest Only Maturity Team who you can talk to during the last 3 months of your mortgage term and they might agree to extend the term but no guarantee.

This seems to me to be leaving it rather late as the chances of selling up and moving in 3 months are pretty slim.

Does anyone have any ideas of what can be done to extend the term with Santander or someone else by re-mortgaging but it must be on an interest only basis? We are 63 and 64 yeasrs old by the way but still working running our own business but without a very high income according to our accountancy books.

kingstreet

The problem you may have remortgaging is that even if a lender will lend on interest-only with no repayment vehicle, FCA rules mean they have to calculate affordability using a repayment mortgage.

We're talking £300k+ here, so what kind of income do you have?

Thrugelmir

phidon wrote: »

This seems to me to be leaving it rather late as the chances of selling up and moving in 3 months are pretty slim.

The problem is yours not the lenders to resolve. As Kingstreet has pointed out you've a large mortgage to repay. By my reckoning around £350k. That's going to require a sizable retirement income to be affordable.

If you are unable to repay capital while interest rates are low. Then you are obviously not going to manage as and when interest rates rise. Perhaps best to plan your own futures while you still have time. Rather than leave fate to the gods.