Has anyone converted their mortgage back to int only to help them stick to a budget??

rubydoiwannabee

Hi
Pretty much as above really?

We are currently £300-400 a month short on what we need to live on to cover all min payments etc. If we convert our mortgage back to int only, this covers it.

Has anyone else done this? If so what did you do with your life cover? And how long did you do it for?

Thanks guys.

rubydoiwannabee

Please can anyone help?

Seaxwyn

Yes, I did that - and 2 years (or so) later I'm still paying interest only.

I left the life insurance as it is, so maybe now there would be a shortfall if one of us dies.

I don't feel 100% happy about paying interest only, but for us it's the only way of coping for now.

Good luck!

kate705

Hi there,
After long deliberation I took out 25% interest only and 75% repayment for fixed rate for 5 years. We hope to switch again to 100% repayment in 5 years when the economy picks up and our commitments are fewer. I know it isn't ideal but we also have a huge overdraft and a loan.
I'm still not sure if this was the right thing to do but couldn't see how to make the big repayments even though we were cutting back.
Have you posted your SOA here yet?

Good luck,
Kate

Shineyhappy

Hi,

18 months ago I bought my ex out of our flat, to do this I had to change the mortgage to interest only and I plan to leave it as interest only and make capital repayments when I can.

I had to borrow 5k from my mum to raise money to get him out and i also had other debts (see paid off bit in my signature) and having paid off the loans, cards and overdraft I have started to pay back my mum. Once that is done I can overpay my mortgage in lumps of 500 or more which is what I intend to do.

missyp123

Yes we have also had to this when our mtg came out of its fixed rate with NR :mad:

But we just want to tackle the unsecured debt for now, so we will prob stay that way for a while. Currently looking for re-mtg deals but at the mo the variable is better than anything we can fix on.

I think allot of people are having to do this simply to survive, your not alone!

rubydoiwannabee

Thanks everyone for your comments. I am most worried about the fact that if we take the step we won't have an investment building up to pay it off.

Do you all intend to swap back to repayment at some time in the future. We have 19 years left on our mortgage with only approx 36% of it covered by an investment.

In the short term it could make the world of difference and have us affording to stick to a realistic budget and make our min payments (interest reducing yet to be tackled) on our debts with 4 creditors.

Such a hard decision....... I want to do it for the short term relief, but not the long term worry??!!!!

Seaxwyn

I have no plans at all - which worries me. We are paying a large loan, which ends in a little over 4 years, and while we are paying that I can't see any way of paying the mortgage as well.

On the plus side, we do have a lot of equity - so long as prices don't fall too far - so I console myself by thinking that if we can hang on in here til the children leave home, we can sell the house, pay off the mortgage and still have some money left to put towards a smaller place.

Shineyhappy

I don't intend to switch back at the moment. I can overpay upto 10% of the total mortgage 15.3k a year anyway so I will stick with that for the next 5 years anyway and I dont have insurance as I have no dependants and I am not forking out for anyone else to inherit it without a mortgage!

kate705

Hi
Like Seaxwyn, we have equity in the house and also think it may be easier to downsize later when the childern leave home. we don't want to pay 25% interest only for too long...it works out to be more expensive long term.
I found it a difficult choice to make.

garnettgirl

I did it for 2 years. My fixed rate ended after 1 year (I thought it was 3!) and I had an awful deal so had to go interest only.

I had no life cover as I'm single with no children.

I'm back on repayment now.