Interest only Mortgage?

dave1982

On radio this morning woman was on talk show saying she switched to a Interest only Mortgage.That her repayments went away down is this hard to arrange with bank i'm with First active.Also on variable rate

Sleipnir

It's not quite as simple as you probably think. Have you looked into what an interest-only mortgage is?

People hear "I switched to <insert mortgage type here> and my monthly repayments went down" and say "that's the one for me. Where do I sign?"

tinofapples

We went interest only for the first 3 years of our mortgage and while repayments are a lot easier its of no real benefit to you unless you're struggling financially. Obviously you're not paying any capital back during that period, like fighting a losing battle !!

dave1982

Yeah thanks thing is i'm out of work at the moment so every little bit less i have to repay the better.I'm 4 years into a 40 year term.

tinofapples

In that case i would defo talk to your provider, its in their interest (Excuse the pun) that you keep making repayments even if it is only interest you're paying back.

dave1982

Thanks let ye know what they say:D

ferga_com

If things get really tight for you, you could also ask your lender for a couple of months break from repayments. That's costly as they'll add the skipped repayments on to your loan and then you'll pay interest on them, so interest-only is better, but if you're stuck...

Have you looked into Mortgage Interest Supplement?

daheff

dave1982 wrote: »

Yeah thanks thing is i'm out of work at the moment so every little bit less i have to repay the better.I'm 4 years into a 40 year term.

chances are if they do let you go interest only for a year or two when you do go back to paying off capital as well they will reduce the term of your mortgage (as its 40 yrs)...so that you still pay back the total amount over 40 years (because interest only is pausing the payback time)