Interest only mortgages

Posted on 25 September 2012 by James

I am coming to the end of a variable tracker and finding it difficult remortgaging. I am on an interest only deal which I intend to repay using my company pension AVC scheme. It is projected to pay out a lump sum way above what my loan is but a couple of lenders will not give me an interest free loan unless my earnings are at least £50,000, which they are not.


The only lender I am aware of that insists you earn at least £50,000 is the RBS Group, which covers Royal Bank of Scotland, NatWest and Coutts amongst others.  The majority of other lenders accept a pension plan as an acceptable repayment vehicle, but they all have different qualifying criteria.

Maximum loan to value: this ranges from between 50% - 80% with the majority at 75%.

Value of Pension Fund: ranges from 25% of the current fund value to the providers mid-point projected value being sufficient to repay the mortgage.

With a loan of £92,000 I believe we can help you and that you would benefit from speaking to one of our independent mortgage advisers.  Please call 0344 346 3672 and tell the consultant the date and title of your question, they will then be able to help you find the right interest only remortgage for you.


Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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