Interest only mortgage advice

wayne144

looking to purchase new build property for residential use with the thought of using an interest only mortgage, I would be looking to put down £350,000 deposit with a £350,000 interest only mortgage over a 7 year period on a fixed rate for the term with the intention of selling that property after 7 years, downsizing and repaying the loan. Using the standard mortgage calculators i cant borrow enough but i do have enough savings to cover the full seven years payments so repaying the mortgage would never be an issue, does anyone know if anybody would offer a mortgage under these terms or am i wasting my time looking? Any advice would be greatly appreciated.

AnotherJoe

Why over seven year period? Would it be affordable over 25 or 30 years? Then after 7 years downsize.

kingstreet

You can't use savings as an aid to affordability.

You will simply be expected to borrow less. An offset product might be helpful.

wayne144

Thanks Kingstreet,
I thought that would be the case, just not sure why if i can prove i wouldn't be a credit risk.

kingstreet

Mortgage lending affordability is predicated on a source of regular income to service it, not having an equal amount of savings.

wayne144

My regular income would cover the interest only payments and normal living costs without having to use any savings, but based on the mortgage calculators my salary isn't sufficient to hit the loan amount.

AnotherJoe

wayne144 wrote: »

Thanks Kingstreet,
I thought that would be the case, just not sure why if i can prove i wouldn't be a credit risk.

Because they want to make a profit on the deal through you paying interest, not getting into repossessions. And also they have to operate under guidelines for affordability.