There are still many people who have an interest-only mortgage which is coming to the end of its term. For whatever reason, the original strategy for repaying it is often no longer an option, and for many moving down market is not desirable. Many lenders are now willing to consider extending
a term even if it goes into the 70s and 80s – particularly if part of the new arrangement will include some repayment of capital. A recent example we know of involved a man aged over 80 being given an extension of 10 years for the mortgage on the basis that half of it would be on a repayment basis. It is worth talking to your lender. If you are paying the lender’s Standard Variable Rate (4.5% or more), you should also ask for a better interest rate, e.g. a two year fixed rate. We had one client recently who we advised to do this. With just a telephone call she was able to reduce her mortgage by 2.5% for two years – saving her £400.00 per month. If talking to your existing lender does not work, then you can look at one of the new Lifetime Mortgage options if you have enough value in the property.
No comments:
Post a Comment