First mortagage - end of fixed term - what happens?

larryuk

Hello,

Just looking for a bit of advise.

Myself and partner took out our first mortagage as FTB's last summer and our 2 year fixed term comes to an end next summer.

We took a 100% interest only mortgage, and I was just wondering what happens at the end of the fixed term. I know that if we just left things, we moved to there standard variable rate, but what options would be available to us? Ideally we want to stay interest only for a few years whilst we bear the brunt of the first few years cost of getting the house up together/wedding etc.

Any thoughts/help appreciated!

KiKi

Hi there. You could:

* remortgage with another product, either with your current lender or a different one. You could get another fixed-term, interest only deal if that helps you.

* approach your current lender with regards to getting a good deal to stay with them (eg, could they extend the current fixed-term for another year?)

If you are interest only now, that doesn't mean you'll automatically revert to repayment and interest when your fixed term ends, unless that's part of the T&Cs.

Don't forget to check out if there are penalties associated with redeeming your current mortgage and moving to a new one either before or after the fixed-term ends.

Sorry I can't be more specific; I'm no expert!
KiKi

larryuk

Ahh thats great, I'm not too worried about it at the moment, as its a little way off, but I thought I should at least give it a bit of thought.
We are getting married this year and have completely renovated the house so cash is still tight and will be for the next year or so, therefore knowing that there is a possibility that I could remortage gives me a few options to look at.

Thanks

maninthestreet

In a falling market, how much is your house going to be worth in next summer? Given that you are not paying off any of the mortgage capital, there is a distinct possiblity your house may be worth less than the outstanding mortgage, and there would be little chance of securing a re-mortgage deal.