Selling House this year - move to interest only?

pretamang

We're looking to sell our house this year and re-locate.

Doing everything at once seems to be too much a of a logistical nightmare: buying & selling chain, moving to new jobs, getting a new mortgage...

To make things easier we're thinking of selling first, then buying chain free. We could live with family or rent somewhere modest in between.

If the house is empty and on the market, would going onto an interest-free mortgage be a good idea? We're about to come to the end of our fixed term mortgage, so will soon move onto a standard rate with higher monthly payments. Lower interest-only payments would help us with moving/relocating/renting costs.

I've never even considered interest-only before, been fixed term deals all the way to ensure we know what we're paying and that the loan is getting paid off.

I have a meeting with a broker next week to discuss it, but before I do thought I'd run it on here to see if it's a crazy idea or not?

foxy-stoat

If you want to take out a new interest only mortgage while the property is on the market for a few months then I would say just stick with where you are and accept that your mortgage will be slightly higher while you sell, unless you can get a new mortgage with no early repayment charges and low broker and legal fees.

Good news is your capital will reduce each month so not all of your mortgage payments will be dead, you are be adding to the deposit for the next property every month.