Can I just pay interest-only on my mortgage?
An interest-only mortgage allows you to pay just the interest charged each month for the term of the loan. You don’t have to repay the amount you’ve borrowed until the end of the term.
What does paying interest-only mortgage mean?
With an interest-only mortgage your monthly payments only cover the interest on the amount you borrowed. This means it’s important you have a plan for how to pay off the capital (the amount you have borrowed) and understand your options.
What is wrong with interest-only mortgages?
With a repayment mortgage, you spread the repayment of the capital debt and the interest into even monthly payments over the course of the mortgage term. The only problem is, the capital debt is still outstanding. In other words, you haven’t actually paid back any of the amount you originally borrowed.
How long can you have a interest-only mortgage?
Interest-only mortgages will come with an initial rate, often lasting between two and 10 years. After this, if you don’t remortgage, you’ll be put onto the lender’s standard variable rate, which is likely to be uncompetitive.
What is the criteria for an interest-only mortgage?
To get an interest-only mortgage, most lenders want you to have an LTV ratio of 75% or lower, some will go up to 80% and a few will go to 85% which means you must put down a deposit of 15%.
Why would you have an interest-only mortgage?
The advantages of interest only mortgages are: Lower monthly payments because they only cover the interest. More flexibility to choose where your money goes. You could save up enough to pay off your mortgage more quickly or keep a lump sum to buy something else.
Was I mis sold interest-only mortgage?
If you feel you are owed interest-only mortgage compensation, then you need to complain. But first you need to work out who was in the wrong. Try to find evidence that shows you were mis-sold your mortgage. This could be paperwork that shows you received financial advice when you took out your loan.
What is the criteria for interest-only mortgage?
Can I get an interest-only mortgage at 65?
While there’s no minimum age requirement, retirement interest-only mortgages are generally aimed at older borrowers, such as the over 55s, over 60s and pensioners who might find them easier to qualify for than a typical interest-only mortgage.
Can I get an interest-only mortgage at 60?
Can you remortgage at the end of an interest-only mortgage?
What happens when my interest-only mortgage ends, can I remortgage? Once your original mortgage comes to a close, if you can’t afford to repay all the capital you can either ask your current lender to extend the mortgage term or remortgage to a new lender.
What happens at end of interest-only mortgage term?
If you have an Interest Only mortgage, your monthly payments have been paying the interest but have not reduced your loan balance (unless you have been making overpayments to purposely reduce the balance of your mortgage). This means that at the end of your agreed mortgage term, you need to repay your loan in full.