Interest Only Mortgages

bt7019

Does anyone know if there are any straightforward interest only mortgages around? Just tried Virgin money but they need a minimum income of £75000, tried another but you have to be within 5 years of retiring.


I have a property without a mortgage & am looking for somewhere bigger. I'm in the slightly sad position of expecting to inherit more than enough money to cover the loan amount in probably the next 5 years. If that doesn't happen, I'll look at putting money into an ISA or similar, & of course there's the option of downsizing upon retirement to cover a shortfall. However I'm not sure if those are conisdered sufficient by mortgage companies.


Thanks for any assistance. I've tried doing some searches myself but although there seem to be a reasonable number of interest only options, the results don't go into enough detail of what the criteria is for them beng offered.

Kentish_Dave

I’ve interest-only with HSBC, long period, op to my 69th birthday, and about 1.5%.

SonOf

Does anyone know if there are any straightforward interest only mortgages around?

Most lenders still offer them. There are still plenty of people with repayment vehicles in place that need an interest only mortgage. Also, buy to lets see interest only as the most common method.

I'm in the slightly sad position of expecting to inherit more than enough money to cover the loan amount in probably the next 5 years. If that doesn't happen, I'll look at putting money into an ISA or similar, & of course there's the option of downsizing upon retirement to cover a shortfall. However I'm not sure if those are conisdered sufficient by mortgage companies.

That is all a bit wishy washy.

Why not go repayment mortgage to begin with and avoid using the ISA later.

Thrugelmir

bt7019 wrote: »

I have a property without a mortgage & am looking for somewhere bigger. I'm in the slightly sad position of expecting to inherit more than enough money to cover the loan amount in probably the next 5 years. If that doesn't happen, I'll look at putting money into an ISA or similar, & of course there's the option of downsizing upon retirement to cover a shortfall. However I'm not sure if those are conisdered sufficient by mortgage companies.

Lenders are no longer interested in lending on a what if basis. As the level of regulatory scruntiny is far too high. What matters is your current financial position and meeting the lenders criteria for interest only mortgage products.

bt7019

Thanks all - looks like it's worth me keeping looking into it. KentishDave - I had a quick look at the HSBC site & they demand a minimum income of £100k to lend on an interest only mortgage, so I guess I need to go through all the options until I can hopefully find one. I've done the basic applications & there is no problem with lenders lending me more than I need, I just don't want to be paying the larger amounts at the moment.



SonofDave - sorry, yes it is a little wishy washy. What I mean is I want to keep the repayments very low at the moment, but if circumstances don't turn out as I expect in say 5 years, I've still got another 15 years of working life to pay off the loan part


Thanks all

Kentish_Dave

I’d not realised there was a minimum wage needed, sorry.

haras_nosirrah

This is one for a broker. If you do multiple applications you are going to damage your credit rating

There are a number of lenders who have no minimum income for interest only. Most though will have a minimum equity figure

There are others with no minimum income and no minimum equity but have a minimum house value north of 500k

Engage a professional.

bt7019

Thank you, I’ll contact a broker & post back here for anyone else’s benefit if I have any luck

kingstreet

Bear in mind, the lender affordability calculators all work on a repayment basis, so affording the interest-only payments is not the requirement.

It's being seen to able to afford the higher capital & interest payments which will be more difficult.

[Deleted User]

Not all. I use Cambridge Building Society a lot and they calculate interest only affordability on interest only stress tests.

Obviously they are small lender and only lend in certain areas but there may be other similar smaller building societies that do similar.

No minimum income
No max age
Downsizing as repayment vehice
No credit scoring

Very useful lender to have access to for tricky cases