Advice needed please

williamD1964

Long story so please bear with me.
I am 52 years old.
I have mortgage of £185K paying £580 with 13 years remaining. At the moment I am paying interest only.
I have £85k in the bank after taking severance from my job.
I have a pension of £900 a month.
My wife was working until recently, bringing in £1000 a month but recently had a stroke so is unable to work so I am returning to work full time, on £17K a year but this is only a temporary contract but I have been told that it is likely that I will be kept on to a full term contract.

I have had a mortgage since 1998, and have never missed a payment.
I want to re-negotiate my mortgage.

The suggestions I have had is that I pay the £85k off the mortgage, reducing the interest only payment, but pay an additional amount each month so reducing the mortgage amount. Once I get onto a full contract then move onto a repayment mortgage.

Someone suggested an Offset mortgage but I have no idea how that works.

All advice is welcome

Torfoxwell

have you sought advice from a broker ? sorry im unable to offer any advice but hopefully someone here might be able to shed some light....

xyz123

Someone more knowledgeable will come along soon but please think twice before putting all savings in mortgage. As u know from ur wife's situation, bad health can unfortunately suddenly stop you from working and without any savings that will be difficult.

getmore4less

summary
£185K paying £580 I/O with 13 years remaining.

£85k savings

Income £900pm + £17k(temp)

........
Interest rate is 3.76% What is the LTV.

repayment on that over 13 years is £1,500pm and if you paid off the £85k leaving £100k is £811pm

Even 0% it is still £640pm to clear the £100k

I think you need to wait till you get an idea of what support you will get for your wife and make sure you are claiming everything so you have a good idea of income.

I think I would look to see if the lender has any retention deals you can take that reduce the rate.

this issue with any other option is the affordability checks and probably the need to go repayment you will be stretched.

any change needs considerable thought and for now you have the capacity to cover the I/O for the full 13 years if you can live of the pention+ income

williamD1964

LTV would be 36%
Property worth £260000 £280000
Could I extend the loan period to 16 years to take me to 68?
Would this reduce the repayments to a suitable level (under £600)