Changing Mortgage

Morrismagic

Is it possible to change your mortgage payment from Capital and Interest to just Interest just for a year or so and then change back?

_Andy_

At the lender's discretion yes, probably will involve an admin fee. Give your lender a call they should be able to sort it quite easily.

Rikki

If you do decide to ask them to change to interest only make sure you have life insurance in place for both you and your partner in case the worst happens.

Morrismagic

Im with HSBC by the way, anyone had any dealings with them when wanting to change temporarily to an Interest only Mortgage?

JuiceFS

You will be able to do this and your lender will be able to process this for you. I did this recently with B&W and they charged me £100 upfront for the priveledge. As already recommended though, make sure you review your protection arrangements to cover a debt that won't be decreasing all the while you are paying interest only. Your monthly mortgage payments will decrease but your debt won't, so you need to take this into consideration, especially if you do have a family. Hope that helps.

Morrismagic

Hi, I have just had a chat with HSBC (my branch over the phone) and the woman I spoke to said that if I wanted to change my mortgage payments temporarily to interest only then it would be classed as going into arrears? I asked her to explain this as it sounded like complete rubbish but all she could say was, ‘well it happened to a customer previously’? Can someone please help explain these comments cos my parents have recently done this with recently with Abbey due to my mum losing her job (needed to temporarily reduce the monthly payment) and I am now worried that maybe they have been misinformed?

Advice needed please!

Thanks

_Andy_

Give the MSC (Mortgage service centre) a call.

FinancialAdvisor_2

HSBC are very funny about this, an exsisting client of mine was put into arrears for switching to interest only.

Most lenders will allow this as standard practice but not HSBC I am afraid.

JuiceFS

Make it clear to HSBC that you wish to switch repayment methods and not just reduce your payments. I'd go into a branch if you can as the lady on the phone may have misunderstood.

jill2002

Morrismagic - your parents have been informed correctly. Abbey will allow them to convert to Interest Only from Repayment for a £75 fee (same fee again when they want to convert back) maximum loan to value on doing this with Abbey is now 50%.

mentat72

jill2002 wrote: »

Morrismagic - your parents have been informed correctly. Abbey will allow them to convert to Interest Only from Repayment for a £75 fee (same fee again when they want to convert back) maximum loan to value on doing this with Abbey is now 50%.

I can confirm this is correct, my wife and I did this the other way around - Interest only to repayment. Speak to the mortgage person in the branch as the counter staff won't know. It takes £75, 5 minutes and a phonecall from the mortgage person to their HQ. Maybe the £75 is the next charge we can reduce.