We’d like to remind Forumites to please avoid political debate on the Forum.

This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.

📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide

Interest only mortgage & Overpay, Endowment or High Interest Savings Account

2

Comments

  • chelseablue
    chelseablue Posts: 3,303 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    mrsmoneyworries wrote: »
    Not 100% sure tbh. We got a self-certified mortgage (DH is self-employed) and things have completely changed since since then.

    Who is the lender?
  • silvercar
    silvercar Posts: 50,921 Ambassador
    Part of the Furniture 10,000 Posts Academoney Grad Name Dropper
    IMHO you are better off overpaying than switching to a repayment mortgage.

    If you can make overpayments you are in comtrol and if you ever have a time when you can't afford to make overpayments, your lender won't have any issue, whereas switching creates the obligation to pay the higher amount every month for 25 years.
    I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.
  • zenshi
    zenshi Posts: 1,142 Forumite
    Part of the Furniture 500 Posts
    mrsmoneyworries wrote: »
    Not 100% sure tbh. We got a self-certified mortgage (DH is self-employed) and things have completely changed since since then.

    That is exactly my situation!
    LBM.....sometime in 2013 £27,056. 10 creditors
    June 20.....£7,587.....3 creditors left 72% paid

    £26,200 on interest only part of mortgage (July 16)...will chip away £17,103
    £49,200 repayment mortgage ( July 16) £37,764
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
    10,000 Posts Fifth Anniversary Name Dropper Photogenic
    I didn't think you could even get endowments any more? Even if you could, AFAICR the tax treatment changed so there was no advantage.

    If you overpay, you effectively turn your IO into a more flexible repayment mortgage. Just be sure not to overpay too much, there will probably be some limits, such as no more than 10%.
  • mrsmoneyworries
    mrsmoneyworries Posts: 102 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    chelseablue wrote: »
    Who is the lender?

    It's Mortgage Express (which we now realise isn't the best option the Mortgage Advisor could of used). However, they honoured any current mortgages but don't accept new applications.
  • mrsmoneyworries
    mrsmoneyworries Posts: 102 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    silvercar wrote: »
    IMHO you are better off overpaying than switching to a repayment mortgage.

    If you can make overpayments you are in comtrol and if you ever have a time when you can't afford to make overpayments, your lender won't have any issue, whereas switching creates the obligation to pay the higher amount every month for 25 years.

    This is my way of thinking tbh. However, I wasn't sure it was the best option or not.
  • mrsmoneyworries
    mrsmoneyworries Posts: 102 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    zenshi wrote: »
    That is exactly my situation!

    It's a real nightmare, as we can more than cover all expenses, including a vehicle on finance, yet there appears to be very little room for movement.
  • mrsmoneyworries
    mrsmoneyworries Posts: 102 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    AnotherJoe wrote: »
    I didn't think you could even get endowments any more? Even if you could, AFAICR the tax treatment changed so there was no advantage.

    If you overpay, you effectively turn your IO into a more flexible repayment mortgage. Just be sure not to overpay too much, there will probably be some limits, such as no more than 10%.

    You probably can't, but that definitely wasn't my preferred option. However, had it been the best option, I would have to go along with it.

    I will give them a call and see if there's a limit - they don't state one on this letter, but I realise this may just be a default annual statement letter.
  • mrsmoneyworries
    mrsmoneyworries Posts: 102 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    I have spoken to the Mortgage Company and have been told that we can overpay a minimum of £25 per month, up to a maximum of 1%. It will come off the capital balance.

    Does this sound average?
  • chelseablue
    chelseablue Posts: 3,303 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    That doesn't sound like very much


    I'm with Halifax and can overpay by 10% of the balance each year.
    So this year I can overpay £23,000 (not that I will be!)
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 354.6K Banking & Borrowing
  • 254.4K Reduce Debt & Boost Income
  • 455.5K Spending & Discounts
  • 247.4K Work, Benefits & Business
  • 604.3K Mortgages, Homes & Bills
  • 178.5K Life & Family
  • 261.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.7K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture