interest only mortgage or stay with capital and interest

apples1

Hi Ruth,
Sorry your thread has gone like this. It's obviously not something to do lightly but just to let you know I did a payment holiday and then also did interest only. In difficult times it kept us our home and reduced the stress levels which would have put a serious strain on our marriage. We are now back on repayment and have even reduced the term of the mortgage to increase our monthly payments to "make up" for lost time.

We were lucky that in the couple of years we did this the house also went up a lot in value which meant we were extra glad to have hung on to our asset. I know it's not right for all but it worked for us.

p.s there was no charge to swap to interest only (or to swap back again).

nester

Hi Ruth,

Don't be distracted by the tone of replies. You need to keep your head on and only you know the real state of your finances. Try not to go to interest only. You will get a salary increase in the future, but it sounds as though that's what you need just to keep your head above water. Your salary increase will allow you to keep making your normal repayments, but perhaps not if you also have to repay the extra costs of spending while away on holiday etc. Going to interest only will give the illusion of making ends meet and being able to afford holidays etc. The stress of the extra cost of your holiday at a time you can't afford it is not really worth it. You will come back to bills etc. Your children just want time with you on holidays. If they mind a bit about cancelling the on eyou have booked, well perhaps that's not such a bad life lesson to give them. Sometimes somethings have got to give. It takes a lot of saving to put away £1,000-£2,000 and it will take a lot of repaying. Don't feel you need to keep up appearances.
That all sounded a bit sanctimonious and negative but I know how quickly holiday destinations etc are forgotten. Your family need a relaxed mum not a stressed out holiday goer.

Jennifer_Jane

I would not have been able to afford my house had I not had a 'never-ending' interest-free mortgage. Since then I have been putting in an extra 10% to repay the capital (you must stipulate it's to go against Capital, when you send the mortgage lender the cheque, otherwise it will be set against the interest). As soon as my mortgage came off the fixed interest rate, I paid off money from savings (so had been saving in the meantime), and am now paying £124 per month, yes, interest only, and only have £19000 to repay. Of course I have some plans in hand to do this, had endowments/pension money etc from another country, but I also saved and saved.

So I am pro-interest only SO LONG as you are intent and focussed on repaying it as soon as you can. It got me out of a hole, it can get you out of one too. My suggestion is to investigate lengthening the term of your contract, but I don't know whether this will involve any cost to do so.

Good luck, enjoy the holiday and relax, but perhaps don't book another one until you are well and truly out of the mire!

Regards
Jen
x

jedimonkey

apples1 wrote: »

p.s there was no charge to swap to interest only (or to swap back again).

I think this is an ok idea - as long as you treat it as short term and stay focused. its all to easy to get used to the lower payment and having the extra cash around. Check there is no charge for switching - Northern Rock charged me.

Jennifer_Jane wrote: »

Disgusting post! You should be ashamed (and not just because of your terrible grammar, although you should be ashamed of that too).

Heheheheeeee. ashamed of the grammar - made me laugh :T

codheadling

superb,,,i can hardly wait for the next episode

jonesMUFCforever

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