If you currently have a repayment mortgage (the balance will be paid off at the end of the term) you can apply to temporarily switch your mortgage to an interest only mortgage for a 6 month period or extend your mortgage term.
If you switch to interest only for 6 months:
- As you’ll only pay the interest charges during this period you will see a reduction in your monthly payment.
- You should note you won’t be reducing your capital balance during this time, meaning your monthly repayment could be higher than it is today.
If you opt to extend your mortgage term:
- Your monthly repayments will reduce
- You should note that the total amount you pay back to us will be higher
- You can opt to switch back to the original term within 6 months
We won’t carry out an affordability assessment and your credit score won’t be impacted by either of these changes.
Please note that your mortgage will come with a follow on rate that may impact these examples. In the large number of cases it will be Bank of England Base rate plus 3.14%. However most clients will opt to review their rate at maturity.
The following examples are based on a mortgage of £850,000 over with a remaining 10 year term on an interest rate of 6%.
Representative Example
Temporary switch to interest only for 6 months
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Current payments
(capital repayment)
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Payments for 6 months
(temporarily at interest only)
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Payments after temporary interest-only period
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Extra this will cost you over the lifetime of the mortgage
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Extending the term of your mortgage by 10 years
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Current payments
Term = 10 years left
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Payments with an extended term
New Term = 20 years
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Extra this will cost you over the lifetime of the mortgage
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