Advice on remortgaging part interest only

deanp85

Hi everyone and thank you for taking the time to read this post.

To start, basically my mum and step dad went through a number of very difficult years together, and have come out the other side of it with a very complicated financial situation.
They are not the best when it comes to managing their money and budgeting, so as I became aware of this, I stepped in to help sort them out, managing their accounts for the last 1.5 years and getting them under control.

The next key piece of the puzzle is of course the mortgage.
They currently owe ~£129,000 on the mortgage and have had this with Halifax for the last 12 years 8 months, and have ~12 years left on the policy.
~£29000 of this is on an interest only basis, and the rest is on repayment.
They're currently on Halifax' SVR of 3.99% for everything.
Looking at recent sales of similar houses on the road they've sold for ~220,000 which would put them at 59% LTV
They're currently paying £943 a month for the mortgage, which is stretching their budget to the max.

Is there any way to move the mortgage to another cheaper provider that will take on the part repayment and part interest only?
Or is there anything that can be done?

I'm sorry for the lengthy post, I've been worrying about this for the last year and now seems the absolute must time to do it, but can't figure out how.

Any advice anyone could provide would be massively appreciated.

Thank you

dimbo61

Well can they check /apply online to the Halifax for a new deal !
I would guess they could get a cheaper rate for the whole mortgage on repayment

deanp85

Hi, thank you for the reply.

I'm looking at Halifax' current deals at the moment. Best I can see is a 5 year fix at 2.84% with no application fees which would cost roughly £820 a month, saving over £7000 over the 5 years. But that's only if the £29000 currently on interest only stayed that way.

The problem is that putting all of it onto repayment on that deal would bump their monthly payments up by £115 a month.. (£1058!!) which they can't afford.

This is the nightmare I've been worrying over for so long

Thrugelmir

If repaying the interest only element part is an issue now. Then likely that the problem will only get worse. Perhaps worth considering longer term options. As any increase in interest rates appears to be totally unmanageable.

getmore4less

why not go for the 2y rate 2.39% and overpay as much as possible.

for a retention deal they may let you keep the current split why not ask.

the I/O needs addressing as each year it is delayed the amount needed per month goes up to finish within the same term.

deanp85

Hi guys, thank you for your replies.
I absolutely agree with your views on the interest only part being an issue, and am talking to them about sorting it out. Whenever I ask my mum about it she just says it will be paid for by inheritance in the future... not the most solid of plans.
I said the same last night, using the extra savings to over pay, as it's the only way to reduce the payments for a future remortgage.
I think they would be more comfortable with a 5 year fix as it gives them stability for a much longer term.
I've had to manage every penny of theirs every day for the last year and a half, and need to be able to let go some day as well.

I'm hoping the same, that Halifax will let them keep the current split. If so then this seems like a workable solution.

Thank you so much for all your replies.
If anyone has any other ideas or experience with this situation I'd be really happy to hear your views.

Thanks

nkkingston

Could they make the whole lot repayment and extend the term so the payments are lower?