Isa linked interest only mortgage

amlip

Hi All
this is my first post ,even though I've been subscribed to the site for several years and I would greatly appreciate any good advice
I have a small interest only mortgage, which was taken out in 2004 and was sold an ISA to run along side it.
The Isa hasn't performed very well and will not cover the mortgage,however I have not received any advice from my BS concerning this shortfall and to add insult to injury have received a letter to say that they are not accepting any new contributions from 1st November.
Thanks in advance.

Thrugelmir

amlip wrote: »

The Isa hasn't performed very well and will not cover the mortgage,however I have not received any advice from my BS concerning this shortfall

So what action have you taken? The responsibility is yours.

amlip

Hi ,I have been to the BS and they have told me that it is now up to me to find a different investment to make up the shortfall.I'm not sure what I should do next.

exiled_red

How long does the mortgage have left to run, how much will you have to repay and how big is the shortfall?

Obviously the BS are correct in that you will have to find another way of getting the money, the ISA not taking more payments isn't neccearily a bad thing as it isn't performing well, it means you have money to put into other products, depending on the amount of money you are looking at it might be worth speaking to a financial advisor

amlip

Hi, it has another 12 years to run.I'm not sure if I want to invest in something else and run the same risk or just switch to a repayment mortgage.I'm just a bit miffed by the BS as they seem to be a bit blase about the situation as the BS traded under a different name and nothing mortgage /ISA related can be dealt with in branch.
I feel like they have basically said ,sort it all out yourself and suck it up.
Unfortunately I have no clue as to what I'm doing/going to do from here and would appreciate a point in the right direction.

exiled_red

If you aren't wanting to invest in another product then I guess your options are fairly limited, firstly I would consider speaking to a financial advisor to see if they can suggest anything, but to me it seems that your best option is repaying the mortgage. I believe that with interest only mortgages you can repay some of the capital as well and treat it like an unoffical repayment mortgage - but you should look at the terms of your mortgage and see if this is an option and how it would compare to remortgaging on a repayment mortgage (bare in mind applyig for a new mortgage would subject you to credit and affordability checks etc.

Obviously repaying the mortgage will make the monthly payments more expensive than you are paying on interest only, but you won't have to find the huge sum at the end of the mortgage. So you should do the maths and see how affordable it is and work out how much you have to pay off to clear it by the end of the term, and figure out what the best thing to do with the money invested in the ISA if you stick with the interest only option but make overpayments.

As I say independent financial advice is probably the way to go

amlip

Sounds like a plan, you've been more helpful than the BS!

Thank you for your help

waveneygnome

How much is outstanding on the mortgage?
How much is your ISA currently worth?
What are you currently paying per month on interest?
What are you currently contributing to your ISA?