How difficult to get interest only residential

magicmcone

A bit of our circumstances:

Late 30s couple, combined income just over £100k, property worth about £550k, mortgage would be about £250k.
We have been able to save a fair bit until now (therefore the equity), but now expecting a baby, so would give us peace of mind to keep our monthly bills as low as possible (don’t think we will struggle at all, just about opening up as much rooms as we can). Borrowing more and having a large emergency fund is also an option, but from a mental health point of view, knowing that my mortgage is £800 and I can make repayments or invest at my own pace is something I find very attractive (call me old school there).
I believe I understand the risks, but in certain way don’t fully apply to us as we are both foreign nationals and don’t plan to retire in the UK and find it unlikely that any projected equity doesn’t afford us a decent place for retirement.

With all that said, how hard do you guys think will be finding an interest only at a decent rate? (No other repayment vehicle apart from the eventual sale of the property)

Many thanks in advance!

housebuyer143

Based on your salary and house price you should have options available to you for interest only. There are not many lenders who do it so you should consult a broker. I'm with YBS for my interest only mortgage and am using downsizing as a repayment strategy. 
I didn't have as many options as you because my salary wasn't £100k.

Downsizing should be okay for your option for repayment, but that does depend on if you can get anything in your area for less if you had to downsize and repay the loan. That is normally a condition of this strategy. 

ACG

Speak to a broker. Good income, good equity there should be options. 
But you might find it better to do a longer repayment term rather than interest only. 

Hoenir

magicmcone said:

invest at my own pace is something I find very attractive (call me old school there).
I believe I understand the risks, but in certain way don’t fully apply to us as we are both foreign nationals and don’t plan to retire in the UK and find it unlikely that any projected equity doesn’t afford us a decent place for retirement.

With all that said, how hard do you guys think will be finding an interest only at a decent rate? (No other repayment vehicle apart from the eventual sale of the property)

Not old enough to understand the fundamental reasons at why interest only mortgages were pulled from the UK market following the GFC of 2006-2008. As for investing instead. There was a generation that thought stock markets were the better option. The complete collapse of the Nikkei Index in 1990. Blew that concept out of the water.  Not so much the correction but the lack of recovery. Which ultimately took many decades. Costing many savers large sums of money. 

Wishy washy plans are unlikely to gain much traction. 

magicmcone

@Hoenir to start, what you are saying is inaccurate as they were never pulled out, but made stricter to obtain.
More importantly, at no point I asked for financial advice, so if you have nothing to say about the question asked, please keep your wisdom for whoever requests it. Not just today,  try to remember it every time you are tempted to behave in the same immature way. That is my unrequested piece of advice to you. We are even on that now! 😁

magicmcone

ACG said:

Speak to a broker. Good income, good equity there should be options. 
But you might find it better to do a longer repayment term rather than interest only. 

Good point. It could definitely be a good middle ground option.

housebuyer143

Just to add, interest only mortgage are normally the same rates as the standard ones. If you didn't fancy finding a broker, 3 good and generally cheap lenders that should meet your needs are Barclays, YBS and Skipton. You can always look at their rates and call their in-house team to discuss. 

Some people clearly don't like or understand why people would want interest only, but probably li think personally for me it's the best option. I have the lowest payments possible with an option to overpay if I wanted to. I really don't need to be in a 4 bed house when I'm 70, so to me it makes no sense to have all my capital tied into my house.

magicmcone

housebuyer143 said:

Just to add, interest only mortgage are normally the same rates as the standard ones. If you didn't fancy finding a broker, 3 good and generally cheap lenders that should meet your needs are Barclays, YBS and Skipton. You can always look at their rates and call their in-house team to discuss. 

Some people clearly don't like or understand why people would want interest only, but probably li think personally for me it's the best option. I have the lowest payments possible with an option to overpay if I wanted to. I really don't need to be in a 4 bed house when I'm 70, so to me it makes no sense to have all my capital tied into my house.

Thanks. Will have a look at those 3. Still few months to remortgage, but wanted to start weighing options.
Exactly same mindset. Plan to retire in a cheaper property regardless, so rather diversify a bit and have more flexibility than keep every penny in a property that will eventually be sold anyway.

Hoenir

magicmcone said:

@Hoenir to start, what you are saying is inaccurate as they were never pulled out, but made stricter to obtain.
More importantly, at no point I asked for financial advice, so if you have nothing to say about the question asked, please keep your wisdom for whoever requests it. Not just today,  try to remember it every time you are tempted to behave in the same immature way. That is my unrequested piece of advice to you. We are even on that now! 😁

No offence taken. I've better things to do with my time.  If you want people to assist you on this forum though. Wind back on the attitude.