Interest only worry

susieanne

We currently have an interest only mortgage owe £150,000 on it and 10 years left on it. I am so worried because we need to start paying the debt off ASAP. Our current mortgage provider do not provide morgages any more plus our credit rating is very poor. We did try to remortgage a few years but got turned down several times from different lenders for the remortgage. I am thinking the best option for us would to overpay our current interest mortgage. The question is how much do I over pay by to ensure the mortgage is on track? The worry is we have not got lots of disposal income.
So currently owe around £150,000 paying £300 per month interest only. Its on variable rate 

[Deleted User]

Divide the capital by the remaining term.  That will tell you how much you need to overpay each month.

MovingForwards

£1250pm for the capital plus £300 for the interest, less or more depending on how the rate fluctuates. Assuming it is a whole 10 years left.

What's on your credit report as 'ratings' and 'credit score' are not seen or used by lenders. Late payments? Missed payments? Defaults? CCJs? IVA? Etc

Have you spoken with a whole of market broker to see what options are available or have you been randomly applying to lenders?

comeandgo

The amount you pay for interest will slowly decrease each payment you make to reduce the capital amount.  You could keep paying £300 a month and the extra would also go to reduce the capital amount.

susieanne

Thanks for the replys. 
There is no way we could afford to pay £1200 plus £300 we are already paying so I'm really worried now.
We have defaults on our credit report 
We could increase the term as we are young enough and pay over 20 years. Can I ask our current lender to extend over 20 years? Our current lender no longer do mortgages so would it be possible to extend our term  without having to apply for a remortgage ? 

Thrugelmir

Who is your current mortgage provider? 
To start with overpay by as much you can afford to. At least start the ball rolling. 

MovingForwards

How old are the defaults?
How many?
Are they now settled?

If you can still do a 20 year term, speak with a broker to see what remortgage options are available.