Interest only

specious

Hi folks - is interest only still possible?

Scenario is house worth £270k ish. No mortgage. 55 + 8months. I have plans to retire in 3-4 years. A house has come up where I want to retire and I'm £80k or so short of what I need to secure it. I would keep both, new one as a holiday home, current one as it is near my job. When I retire I would sell current house. With just over 11 years to state pension age a repayment mortgage would cost £650 a month, which would leave my budget tighter than I would like. Interest only would be £150ish. I'd be happy with a mixed repayment / interest only paying around £300 a month. Would that idea fly at all? I'd take my mortgage on my current house so around 30% LTV.

ACG

Possibly, but options are slim now a days and affordability will be assessed on the same basis as a repayment. So providing it passes affordability (in the eyes of the lender) and then you could well have options. But I do think you are likely to need a broker.

Lilla_D

I agree with ACG - there are interest only and as you call it mixed options, but they all come with T&Cs, so you're best placed to speak to a broker.

AnotherJoe

Could you downsize your current house? Into a flat perhaps?
Would give you better cashflow

specious

Thanks folks. I probably could afford it. Salary 40k, one child still at University. I'm not sure I want to though! We've become used to very low housing costs. I'd have another set of council tax and utilities as well.

Selling up and buying a flat doesn't stack up. A decent two bed would cost £180k here. After fees, stamp duty etc I'd be lucky to clear £75k. Then I'd have another set of fees to sell it when I retire.

AnotherJoe

How much would you use this place asa holiday home ? That’s quite an investment so it ought to be well used by you it you may as well just go for B&B’s or holiday cottage for the odd time you’ll use it. Otherwise why not wait ?

You also have to be careful it really would be used asa holiday cottage, from what I’ve read quite often when you go down for the odd weekend you just end up doing all those jobs you can’t do in the week, eg jobs round the house, tidying the garden.

Gloomendoom

AnotherJoe wrote: »

You also have to be careful it really would be used asa holiday cottage, from what I’ve read quite often when you go down for the odd weekend you just end up doing all those jobs you can’t do in the week, eg jobs round the house, tidying the garden.

That is pretty much what we do. I keep telling myself that it will be different when I retire.

The OP might make some income from holiday lets to offset the mortgage costs.