Remortgaging every 5 years

elliot330

Hi All,

First post an all that! So sorry if its been covered before.

Total term is 24 years

I am about to remortgage for a 4.69% fixed for 5 years. Interest and capital repayment. No over hang.

After the FT has expired I will then look for another good deal. My question is, during the first fews years am I right in thinking that you only pay the interest, and very little capital. If I keeping moving mortgages will I only be paying interest and not reducing the capital??

Would I be better applying for a interest only mortgage and investing the capital into another investment, i.e. Pep, ISA. etc.

Any help greatly welcomed.

Elliot

payless

so long as you reduce your term next time ( ie take for 19 yrs) then there's no loss in taking a repayment mortgage ( so long as daily or monthly interest calculation)

The myth otheriwse was often used as a ply to help sell endowments

Of course if you are certain ( or prepared to take the risk) that funds on deposit / invested can earn a higher rate of return ( after tax) than the mortgage rate - supposue you might consider alternatives
( This is not a recommnedation for either course of action)

spottydog

Every time we have remortgaged we have reduced the term further which has caused our mortgage costs to rise slightly but our term (and overall cost) to go down.
i.e.
1999 - bought property on 25 year mortgage
2001 - remortgaged with 20 year mortgage
2003 - remortgaged with 15 year mortgage
2005 - looking at trading up so will go back to 25 year mortgage but in the mean time have reduced the original mortgage more than originally planned so have more equity in the house plus as the term is being extended monthly payments will not go up by as much as if we have not reduced the term with our current place.