Interest Only Mortgage - Want to overpay on rented out property
Bobby_Peel
Forumite 38 Posts
Hi all,
I have a mortgage broker looking at some deals for me and I just wanted to ask a question to put my mind at ease before I return on money.
my property is worth £200,000 and remaining mortgage is £103,000.
I was originally looking at repayment mortgages and they came out at around £470 a month.
The interest only deal is around £150.
The broker asked had I ever looked at interest only and I didn’t realise you could overpay on these to buy down the debt.
As my current mortgage is £570, I’m hoping to pay £600 in total each month on either option to reduce the debt faster.
So my question on the interest only deal is could I get stuck further down the line, say when I owe £40,000. At the moment I would be paying £450 a month on overpayments but these would exceed the 10% rule.
I’m not sure if there’s a calculator that would work it out but in my head at the moment I see it as a £103,000 debt and as I’ll be overpaying by £5400 each year I’ll be fine until £54,000.
I also guess as the years go on the £150 amount would reduce as there’s less debt when I take new deals?
just don’t want to sign up for something to reduce the term but in the end might extend it slightly compared to a repayment deal if that makes sense ☺️
I have a mortgage broker looking at some deals for me and I just wanted to ask a question to put my mind at ease before I return on money.
my property is worth £200,000 and remaining mortgage is £103,000.
I was originally looking at repayment mortgages and they came out at around £470 a month.
The interest only deal is around £150.
The broker asked had I ever looked at interest only and I didn’t realise you could overpay on these to buy down the debt.
As my current mortgage is £570, I’m hoping to pay £600 in total each month on either option to reduce the debt faster.
So my question on the interest only deal is could I get stuck further down the line, say when I owe £40,000. At the moment I would be paying £450 a month on overpayments but these would exceed the 10% rule.
I’m not sure if there’s a calculator that would work it out but in my head at the moment I see it as a £103,000 debt and as I’ll be overpaying by £5400 each year I’ll be fine until £54,000.
I also guess as the years go on the £150 amount would reduce as there’s less debt when I take new deals?
just don’t want to sign up for something to reduce the term but in the end might extend it slightly compared to a repayment deal if that makes sense ☺️
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