Interest Only mortgage ends in 2016 and I don't have the capital to pay it off. What are my options?

Posted on 26 February 2013 by Steve

Hi I borrowed £30000 endowment mortgage in 1991 which ends in 2016. Unfortunately had no endowment in place at all to pay back the £30000, but I will have paid back all the interest by then. Can my lender kick me out when it is up or can I just continue to pay the capital back when the interest is paid or will I have to take out another mortgage. I will have paid back all the interest by then so how can they charge me interest again?


The answers to your questions are:-

1. No, the lender can't just kick you out at the end of the term.

2. No, you can't just pay capital back, once the term has finished.

3. Yes, you'll have to look at remortgaging to another lender.

No lender can just kick you out at the end of the term, however depending on your age, personal / financial situation they may not be prepared to grant an extension to you. In this case they will either expect you to remortgage to a different lender, or sell the property. Only in very extreme circumstances would they attempt to seek a posession order.  

If you still meet their standard criteria they might be prepared to extend your term on a repayment basis, however it is more likely that we'll need to look at remortgaging to an alternative lender.

As you still have some time to ge before the end of the term in 2016, I would recommend reviewing your finances now, with a view to making some overpayments straightaway.

If you'd like to go through your options in more detail, then please let me know, and I'll arrange a convenient time for you to talk to one of them.



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