Should I change my Interest only mortgage now I'm married?

Alison16

I have an Interest only mortgage I took out when I was single for £121'000. It has 10 years left. And I have life insurance to cover the debt. The property is valued around £200'000. I am now married. My husband has no life insurance. We are both 55. And he is a smoker. I am worried that if he dies I will still have to pay the mortgage and debt. Should I change the mortgage? And what insurance do we need? I work part time and he is self employed

MovingForwards

What's your repayment vehicle for clearing the I/O mortgage as that's the bigger concern at the moment.

Alison16

I don't have anything in place. We have about £20'000 in savings

csgohan4

For insurance, I suggest an insurance broker to tailor what you need, MSE does an article on life assurance and that would be a good start

in regards to your mortgage, overpay as much as you can.

how much is remaining on the mortgage? Downsizing would be an acceptable solution

For future readers, life assurance, income protection is important part of safeguarding the 'what if's' do it too late and you may not get cover or it becomes very expensive to do so. 

MovingForwards

Not everyone has life insurance, I don't and never even contemplated it.

There's nothing stopping you remortgaging, subject to meeting criteria, including income, and having it as a joint mortgage and a capital repayment rather than I/O (very rare and salary expectations are high, so not for the national average / NMW / NLW people).

Borrow £121k to pay off the mortgage, both young enough to have a decent term to pay it off in and you keep your life insurance going.

Has your husband tried for any insurance to see what the prices are like? 

In the interim, start making overpayments towards the mortgage to reduce the balance as that will also bring the interest down too.
You need to pay just over £1k per month to get the mortgage paid in 10 years, but if you remortgage to a repayment one and extend the term it should be less.
Leave that another year and it's over £1220 just on the capital, then you have your monthly interest payment on top.

What you don't want to happen is 9 years time coming back, still with £121k outstanding and still no means of paying it off.

Speak with a good broker to see what your options are.