If I change from repayment to interest only would my payments reduce by much?

Posted on 19 April 2013 by Kerry


Hi, would my payments reduce from repayment to interest only by much?

Kerry,

The answer is that yes typically the mortgage payment would reduce by a lot, however you have to factor in to your monthly outgoings the cost of funding the repayment vehicle / strategy to repay the loan at the end of the term.

There are some lenders who will still allow you to use the sale of your property as the repayment method for interest only, however these tend to be at the lower loan to value's. Also lenders now assess all cases on a repayment basis, even if the application is for interest only, so if it's an affordability issue for then this may not be the best route.

If you'd like to talk your enquiry through in more, then let me know and I'll arrange for one of our consultants to contact you.

Regards,

Simon

simon.collins@johncharcol.co.uk

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