Temporary switch to interest only mortgage, is it worth it?

eleanorl89

I wonder if somebody could help please as I have absolutely no idea where to start with working this out

Could anybody please work out how much we would pay for a temporary seitch to interest only on our mortgage for a period of 6 months & then what we may pay afterwards. Not even sure if its possible to work out tbh! But anyway here are the details if anyone could be so kind

TOTAL MORTGAGE BALANCE - £263,174.40
LOAN TO VALUE - 80.33%

MONTHLY PAYMENT - £1364.79

Mortgage part 1
- 2 year fixed until 30/06/26
- 5.40%

- £98,534.14 remaining

Mortgage part 2
- 5 year fixed until 31/01/2028
- 4.72%

- £164,640.26 remaining

Without going into the nitty gritty, we are struggling massively with the monthly repayment & other bills. I gave birth 3 months ago so aren’t working at present & am just looking for a bit of respite whilst things get in order

The house is currently on the market but if there’s anyway we could avoid selling it, I would like to

If there’s anyway somebody could work out roughly our ‘saving’ (though i know we’d pay more in the end) that would be so so appreciated 

I’ve tried to phone our lender three times now but have been passed from pillar to post & ended up on hold for over an hour each time!

thanks so much 

No19v87

Assuming you plan to port your mortgage product if selling or are aware there would be early repayment charges?

I think people would need to know the length of your mortgage (not just the fix) to calculate the interest only payment.

I also assume it’d be helpful to know which lender as they may have different approaches to these types of requests.

Hoenir

On a rough calculation interest only would reduce your monthly payments to around £1,091.  Reducing your monthly outgoings temporarily by £274. 

Downside is then after six months you've £1,644 of capital to make good on. 

eleanorl89

No19v87 said:

Assuming you plan to port your mortgage product if selling or are aware there would be early repayment charges?

I think people would need to know the length of your mortgage (not just the fix) to calculate the interest only payment.

I also assume it’d be helpful to know which lender as they may have different approaches to these types of requests.

Yes would be either port or approx 8k of early repayment charges. Mortgage term left is 32 years & is with Skipton

eleanorl89

Hoenir said:

On a rough calculation interest only would reduce your monthly payments to around £1,091.  Reducing your monthly outgoings temporarily by £274. 

Downside is then after six months you've £1,644 of capital to make good on. 

Thanks so much. So would the £1644 be spread over the mortgage term or need paying back immediately? 

ACG

mortgagecalculator.uk - its a nice simple calculator and will show you what payments would be on repayment compared to interest only. You will probably need to do each part individually though. 

It sounds like it might be a good option for you, but in the long run it will cost you more. 

gwynlas

Given the costs of selling and presuming that you want to buy somewhere else you could consider going interest free until your maternity leave is up.

Hoenir

eleanorl89 said:

Hoenir said:

On a rough calculation interest only would reduce your monthly payments to around £1,091.  Reducing your monthly outgoings temporarily by £274. 

Downside is then after six months you've £1,644 of capital to make good on. 

Thanks so much. So would the £1644 be spread over the mortgage term or need paying back immediately? 

Over the term of the mortgage. 

amnblog

You can switch to Interest Only for 6 months under the Mortgage Charter,

You save about £277 for 6 months on cash flow.

After the six months, payments will be a few pounds higher than currently.

If £1,662 over six months if the difference between you keeping the property and selling you may need to look into this more deeply.