Selling buy to let house with interest only mortgage before end of term

nervousftbuy23

Hey all

I've got a slightly complicated situation. For context im 27 years old.

I own a house that is in a trust and is currently let out (tenants have given their notice to leave in the next 3 months). I am now interested in selling this property so that I can buy a diferent property for myself to live in. 

It has an interest only mortgage with about 10 years remaining on it. The mortgage was bought back in 2007-8 at an interest rate of 1.24%. It is with a company called 'Lakehouse mortgages' which i understand is just some holding company.

My questions are

Can I use the 'profit' from the sale to pay back the mortgage amount? What are the general 'consequences' of breaking a mortgage term like this early? 

[Deleted User]

You'll have to redeem the mortgage when you sell, either from the equity, your savings or another mortgage.

K_S

nervousftbuy23 said:

Hey all

I've got a slightly complicated situation. For context im 27 years old.

I own a house that is in a trust and is currently let out (tenants have given their notice to leave in the next 3 months). I am now interested in selling this property so that I can buy a diferent property for myself to live in. 

It has an interest only mortgage with about 10 years remaining on it. The mortgage was bought back in 2007-8 at an interest rate of 1.24%. It is with a company called 'Lakehouse mortgages' which i understand is just some holding company.

My questions are

Can I use the 'profit' from the sale to pay back the mortgage amount? What are the general 'consequences' of breaking a mortgage term like this early? 

@nervousftbuy23                 

- The proceeds from the sale can be used to pay off the mortgage, if that's what you are asking

- You need to check with the mortgage administrator whether there are any penalties associated with paying off the mortgage at this point. Generally speaking, if the mortgage is in a fixed term, there might be an Early Repayment Charge associated with paying it off during the fixed term.

deedee71

When you say 10 years remaining do you mean on the lender's variable rate - is the initial fix or other offering over so there's no penalties for ending the mortgage?  1.24% since 2007 seems a great rate but not sure we have the full picture.

The "in trust" part may need proper legal advice.

lonibra

Lakehouse types are sharks (Google them) and will sting you for as much as they can on the way out.

When you do interact with them, make sure you get important stuff in writing.