No endowment/Re-Mortgage

Deeping_Dave

Hi all,

Hope this is in the correct place. I've run numerous searches but can't find any advice that is relevant to my query.
We have an interest only mortgage of 175K with 6 years 2 months left. I turned it into interest only back in 2009 when we hit hard times. Like many I'm now in a predicament of the mortgage ending soon without the means to pay it back in that timeframe. I know I need to re-mortgage to a repayment but wan't to obviously try and get the best deal out there. My current mortgage is a 1% above base. I doubt they'll allow me to re-mortgage on such favourable terms but was just after some info if anyone had any with regards the best way to go about this? Any tricks to get them to match it or any deals out there you know of that are similar?

Thanks all  

[Deleted User]

No tricks. But if you're on a good rate you don't want to lose, why not just overpay as if you were on a repayment mortgage already for the time being?

Deeping_Dave

I thought of that but I doubt I'd be able to clear the remaining 175k in 6 years even with overpaying. Just trying to get an idea of what's best to do? It'd cost about 2.5k a month to clear it in 6 years 2 months as it is. 

SpiderLegs

Deeping_Dave said:

I thought of that but I doubt I'd be able to clear the remaining 175k in 6 years even with overpaying. Just trying to get an idea of what's best to do? It'd cost about 2.5k a month to clear it in 6 years 2 months as it is. 

Overpay for 6 years and then remortgage?

SpiderLegs

Deeping_Dave said:

I thought of that but I doubt I'd be able to clear the remaining 175k in 6 years even with overpaying. Just trying to get an idea of what's best to do? It'd cost about 2.5k a month to clear it in 6 years 2 months as it is. 

Overpay for 6 years and then remortgage?

dimbo61

So you can't afford £2,500 a month if you hope to pay off the mortgage how much can you afford ?
What did you do when your mortgage IO dropped when the BOE base rate dropped ?
It's 0.1% now so won't get any cheaper.
You have 2 choices so either start overpaying every month and try and remortgage in 6 years or

Sell up in 5/6 years and see how much money you have to buy a cheap place to live.

MWT

Deeping_Dave said:

We have an interest only mortgage of 175K with 6 years 2 months left. I turned it into interest only back in 2009 when we hit hard times. Like many I'm now in a predicament of the mortgage ending soon without the means to pay it back in that timeframe. I know I need to re-mortgage to a repayment but wan't to obviously try and get the best deal out there.

How old are you both now and do you have the income to support a remortgage?

Mostly trying to see how long the new mortgage could be... If you are both 50 now, for example, with sufficient income between you, there is still time to change to a 15 year mortgage term or even longer depending on projected retirement date and post-retirement income.

If you are both 60 then the possible term is reduced of course...

Deeping_Dave

Yes if I remortgage to a new product and change it to 15 years we can afford the re-payments. I'm 51 my wife 45. That would seem the most logical thing to do but I've received so many differing opinions from friends who or were in the same boat. Some say start an investment fund and pay into that what you'd pay into the mortgage and pay it off but that involves risk. Others say just re-mortgage at the end of the term but obviously we'll be 6 years older. I did speak to the bank last year and he was trying to advise me I'm sure that it wouldn't be in my best interests to switch products. I'm not sure why as they wan't me off this one you'd have thought. The house is worth anywhere between 275 and 350 depending on who I speak to locally. Of course nobody is coming out to do valuations unless it's for a definite attempt to sell. Thanks for all your replies so far much appreciated.

MWT

Deeping_Dave said:

... but I've received so many differing opinions from friends who or were in the same boat. Some say start an investment fund and pay into that what you'd pay into the mortgage and pay it off but that involves risk. Others say just re-mortgage at the end of the term but obviously we'll be 6 years older. I did speak to the bank last year and he was trying to advise me I'm sure that it wouldn't be in my best interests to switch products. I'm not sure why as they wan't me off this one you'd have thought.

.. all of the alternatives could work for someone but none work for everyone.

Just have to figure out your tolerance for risk and make the best choice for yourselves..

Probably worth talking to a good broker to get their input, plenty of them around here if you don't already have one..

Also do make sure there are no charges if you terminate your current mortgage early.

You do have a great interest rate at the moment and there is nothing stopping you pretending that you've switched to a 15 year repayment and over-pay the difference until closer to your current mortgage end (assuming no charges for overpayment), then remortgage to say a 10 year repayment product.