Banks to offer more flexibility with mortgage repayments - will this apply to those in a fixed term?

What_time_is_it

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

TheJP

What_time_is_it said:

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

No and it shouldn't. You are paying 1.85%, have some empathy for those now paying 5/6+%. This isn't a how can i make a quick buck scheme its to help those that could loose their house.

Ksw3

Would the missed capital payments be added on to the balance to be repaid over the rest of the term as it was during covid? 

I don't have any need for it, but I think this caught a lot of people out in the pandemic. 

housebuyer143

What_time_is_it said:

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

Banks can do this now for those in hardship but admitting you can't pay your mortgage and needing a payment plan of sorts will destroy any plans you have of remortgaging to a good rate in future just as taking a payment holiday did during COVID.

simon_or

I think you'll have to wait for the details but I expect that it will cover people on a fixed rate.

But remember that you'll have to go to your bank and claim that your mortgage payment is unaffordable so that will probably rule out borrowers like yourself who have been on a low fixed rate for a while.

And would you really want to tell a bank that you can't afford the monthly payment on 2% when you'll be looking to remortgage at 5% in a few months time?

What_time_is_it

TheAble said:

What_time_is_it said:

TheJP said:

What_time_is_it said:

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

No and it shouldn't. You are paying 1.85%, have some empathy for those now paying 5/6+%. This isn't a how can i make a quick buck scheme its to help those that could loose their house.

I agree. But if my bank is offering it, then I will take it. I'll take anything I can from those thieving sh*ts. I am quite capable of empathising with people facing greater financial hardship than I am, wanting the banks and the government to provide targetted help for those most in need, and also wanting to reduce my own outgoings. All at the same time.

The thieving sh*ts did lend you the money to buy a house though no? Without that, no house. I for one am appreciative of my lender.

There cheers for the banks. Hip hip…

What_time_is_it

Lindlou said:

housebuyer143 said:

What_time_is_it said:

Lindlou said:

What_time_is_it said:

TheJP said:

What_time_is_it said:

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

No and it shouldn't. You are paying 1.85%, have some empathy for those now paying 5/6+%. This isn't a how can i make a quick buck scheme its to help those that could loose their house.

I agree. But if my bank is offering it, then I will take it. I'll take anything I can from those thieving sh*ts. I am quite capable of empathising with people facing greater financial hardship than I am, wanting the banks and the government to provide targetted help for those most in need, and also wanting to reduce my own outgoings. All at the same time.

But surely the amount will just be outstanding for longer?  You may get interest on what you put away but then be paying 5/6% interest on it once your fix ends? 

I'd save it and then pay it off the balance when my fix ends. 

It's a lot of effort to save a few hundred on your mortgage a month, just to make a few hundred interest. Personally I think destroying my chances at remortgaging to a rate that isn't SVR is worth not taking the banks up on this.
Nothing is for free in this world, what seems like a nice gesture is anything but.

This. Personally I'd overpay the difference between your current I.85% and whatever you think your new fix might be for the next 12 months. Improve your LTV, and you might get a better deal when you come to a new mortgage deal? 

Thanks for your thoughts on this. I clearly need to find out more about the possible consequences, and your suggestion sounds like a good one too.

Dandytf

Help won't effect Credit Score, is that Score or Rating.

housebuyer143

Dandytf said:

Help won't effect Credit Score, is that Score or Rating.

It might not, but your lender will have it noted on their system and will almost certainly hold it against you

Sarah1Mitty2

TheAble said:

What_time_is_it said:

TheJP said:

What_time_is_it said:

Good to hear that banks will offer some extra flexibility regarding switching to interest only payments or amending the term. Quite frankly this is the very least that they can do.

Does anyone know if this will apply to people who are still in a fixed term agreement? I've got 1 year left on my current fix at 1.85%. I'd like to switch to interest only repayments and stick the savings into an account earning >4% instead. Do you think this will be possible? Or will this not be possible for fixed rate customers?

No and it shouldn't. You are paying 1.85%, have some empathy for those now paying 5/6+%. This isn't a how can i make a quick buck scheme its to help those that could loose their house.

I agree. But if my bank is offering it, then I will take it. I'll take anything I can from those thieving sh*ts. I am quite capable of empathising with people facing greater financial hardship than I am, wanting the banks and the government to provide targetted help for those most in need, and also wanting to reduce my own outgoings. All at the same time.

The thieving sh*ts did lend you the money to buy a house though no? Without that, no house. I for one am appreciative of my lender.

Don`t be too appreciative, if they hadn`t lent so much you would have got the house a lot cheaper, years less debt for the same house, they are not out to help you.

MWT

Dandytf said:

Help won't effect Credit Score, is that Score or Rating.

That isn't what was said though, talking to your lender will not affect your score, and changing your mind and reverting to the original mortgage terms within 6 months of making a change will not affect your score.

Implicit in that is that if you do make a change and don't revert within 6 months then it will impact on your score...

I would read 'score' as credit file, so you should expect the usual markers to be applied if you need help and don't revert.