Barclays reneging on new Mortgage Charter interest-only switch

Sarah1Mitty2

MWT said:

Brie said:

Sorry - but why would the balance go up if the individual has been paying the interest?  The principle would have remained the same.  

it is not that it goes up, it just doesn't go down so at the end of the 6 month period the balance will be higher than it would have been if the normal repayments had been made.

There is no saving by doing this, you just end up effectively taking a further advance for the difference between the normal repayments and the interest-only payment, so you end up with a higher repayment after than you would otherwise have had, and you'll be paying more interest over the term of the mortgage than you would otherwise have done.

Well yes, but it is aimed at people who can`t make the monthly payments, they won`t have a choice, the only other choice will be lose the house, this sin`t going to be like choosing an interest rate fix or something that suits your pocket?

MWT

Sarah1Mitty2 said:

MWT said:

Brie said:

Sorry - but why would the balance go up if the individual has been paying the interest?  The principle would have remained the same.  

it is not that it goes up, it just doesn't go down so at the end of the 6 month period the balance will be higher than it would have been if the normal repayments had been made.

There is no saving by doing this, you just end up effectively taking a further advance for the difference between the normal repayments and the interest-only payment, so you end up with a higher repayment after than you would otherwise have had, and you'll be paying more interest over the term of the mortgage than you would otherwise have done.

Well yes, but it is aimed at people who can`t make the monthly payments, they won`t have a choice, the only other choice will be lose the house, this sin`t going to be like choosing an interest rate fix or something that suits your pocket?

The other choice is to extend the term, taking the interest-only option isn't a fix for anything other than a short term inability to pay and will result in a higher monthly payment after the 6 months is over.

It really isn't the best choice unless you know the inability to pay is going to be resolved within 6 months...

homesaver234

MWT said:

silvercar said:

Or you also extend the term by 6 months. So the monthly payments will be exactly what they were before the 6 month interest only period.

I'm not sure that is an option, so far it has been presented as and either/or choice, so it is one or the other, not both....

I'm sure it isn't an option under the Charter, since it definitely says "or".

Sarah1Mitty2

MWT said:

Sarah1Mitty2 said:

MWT said:

Brie said:

Sorry - but why would the balance go up if the individual has been paying the interest?  The principle would have remained the same.  

it is not that it goes up, it just doesn't go down so at the end of the 6 month period the balance will be higher than it would have been if the normal repayments had been made.

There is no saving by doing this, you just end up effectively taking a further advance for the difference between the normal repayments and the interest-only payment, so you end up with a higher repayment after than you would otherwise have had, and you'll be paying more interest over the term of the mortgage than you would otherwise have done.

Well yes, but it is aimed at people who can`t make the monthly payments, they won`t have a choice, the only other choice will be lose the house, this sin`t going to be like choosing an interest rate fix or something that suits your pocket?

The other choice is to extend the term, taking the interest-only option isn't a fix for anything other than a short term inability to pay and will result in a higher monthly payment after the 6 months is over.

It really isn't the best choice unless you know the inability to pay is going to be resolved within 6 months...

People have had two years to get used to rapidly rising rates, that is enough time to sell things as someone said (cars? are they not mainly on monthly payments nowadays?) to pay the mortgage or get a higher paying job, I don`t think six months makes a lot of difference if you are in real trouble, it just flags to the bank that you may soon be at the "can`t pay" stage, extending the term might be slightly better.

homesaver234

Barclays has said more news today July 21, but that news turns out to be just:

"Come back here on Monday 24 July"
https://www.barclays.co.uk/mortgages/support-hub/

MWT

At least that is still on the right side of Martin's 'August' estimate...

homesaver234

Better late than never. As of today, Barclays are accepting applications.  https://www.barclays.co.uk/mortgages/mortgage-charter/

MWT

This section of the update explaining the requirements gives some clarity on a few points people have queried...

caprikid1

I'm confused you have applied to switch to interest only on two mortgages ?