Are you finding it difficult to obtain an interest only mortgage (some clients call them IO mortgages) or perhaps you have an interest only mortgage that is coming to an end and your current lender will not assist? Or maybe you're thinking "Can I switch to an interest only mortgage", in which, case we can certainly help.
Many lenders have altered their interest only criteria to make it virtually impossible to take out a mortgage on an interest only basis. Some of them not allowing interest only mortgages beyond age 65, whilst others insisting on either a minimum amount of equity in the property or a conventional repayment vehicle such as an endowment or an ISA.
We have lenders with a more flexible approach, that will consider interest only mortgages or remortgages up to age 95.
We have access to High Street lenders who will consider you for an interest only mortgage up to age 95, without insisting on a conventional repayment vehicle.
If your plan is to repay the mortgage by downsizing in the future, you would need to have a minimum of equity/deposit to satisfy the lender, although the exact amount would vary depending on your location in the UK.
SUITABLE REPAYMENT VEHICLES
Most lenders will only consider you for an interest only mortgage if you also take out a conventional repayment vehicle such as an endowment or an ISA. So if you are just looking to pay the interest free of capital repayment, then this could be the mortgage for you.
We find that many people want the flexibility to repay the mortgage by other means such as downsizing, sale of another property or future inheritance.
RATES CURRENTLY AVAILABLE
Rates are currently available from 0.99% (2.3% APRC) fixed for five years.
A ten year interest only loan of £100,000 based on this interest rate would give initial payments of £137.50 per month.
The actual rate would depend on your individual circumstances.
Please ask for your free personalised key facts illustration.
RETIREMENT INTEREST ONLY MORTGAGES (RIO's)
This is a relatively new product on the market offered by high street building societies and specialist lenders as an alternative to equity release. With a Retirement Interest Only mortgage the lender will allow you to borrow the funds that you require on an interest only basis FOR LIFE.
You have to service the interest on it each month, even if one one of you were to die meaning that affordability for this product is calculated on the income that would be there following the death of one partner.
These mortgages are portable onto a new property and can be paid off penalty free once the 2, 3 or 5 year fixed rate periods have expired.
Depending on income, you can borrow up to 70% of the property value and they can be used for either a house purchase or a mortgage on a current residential property.
We also have Buy to Let lenders that will offer interest only mortgages with NO upper age limits. For further information, please click here.
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