Short term interest only mortgage

taxspider

Hi
I am a first time buyer and looking at a house costing 110,000. I have 18k in a savings account, 3k ISA and 7k credit card debts on 0% till Jan, then hoping to move them on again to 0%, tho realise it may not last forever. My salary is about 29k.

I am thinking about putting down a 13k deposit, which leaves me with enough to pay off the cards if necessary. I will therefore need a mortgage of 97k, which will be in just my name as my partner already owns a house.

We will only live in the house for about 3-4yrs as my partner is in the forces, so his IFA has mentioned an interest only mortgage because the repayments will be cheaper and we are not necessarily looking to reduce the mortgage, just keep costs low for now. (We both have children living with ex-spouses and so incur costs on maintenance and travel to see them, so low monthly repayments are a priority.)

I happen to have an endowment policy for 18,500, runs till about 2008, and have life insurance of about 80k, so this will cover any necessary insurance for an interest only mortgage.

What does anyone who knows about these things think to an interest only mortgage? The IFA says most advisors know about the low repayments but they don't tend to recommend them cos they only get any commission if they can also sell you an endowment policy. He won't charge a fee for just sorting out the mortgage, partly cos of the business my partner has already put his way.

Oh, and capped, fixed rate or discounted variable? I prefer something relatively fixed, so I know where I am, but often the arrangement fees wipe out any rate advantage. And is there a rough average for arrangement fees these days, they seem awfully high.

Gosh, lots of questions. Sorry for that, but hope someone can help.

Thanks