Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie

Mortgage Interest Only

Options
  • 05-05-2009 9:00pm
    #1
    Ray007
    Registered Users Posts: 36 ✭


    Hi

    I am finishing up my 3 years fixed mortgage. After that I was thinking of going interest only for 1 year, so I can save up a little bit. I have been told that banks have stoppep doing this.

    Is this true, or can anyone tell me if there are certain conditions you have to meet before this happens?

    I took a 30 years mortgage 3 years ago and I fixed it at 4.6, paying 3022eu/month.

    So how much does anyone know it would be the repayment if I am allwed to go interest only.

    Regards

    Ray


Comments

  • Options
    #2
    confuzed
    Registered Users Posts: 302 ✭✭confuzed


    No one expect your lender can answer your question.


  • Options
    #3
    Toots
    Administrators, Business & Finance Moderators, Society & Culture Moderators Posts: 16,919 Admin ✭✭✭✭✭Toots


    I'm not sure if you can switch to interest only midway through the term of your mortgage, you'd need to check with your lender to see if they'll allow this. Another thing you should be aware of is that when you finish your interest only period, your repayments will increase because you'll still have your capital to pay off within the term of the mortgage.


  • Options
    #4
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    As mentioned above, only your lender will tell you whether or not you can go interest only, as they have discretion on this. In general, if your LTV (the percentage that your mortgage represents of your current home value) is high, like 85% or more, you're unlikely to get interest-only from any lender.

    Interest-only monthly repayments can be calculated as follows: (Balance Outstanding x Nominal Interest Rate / 12)

    Regards, Liam


  • Options
    #5
    homer911
    Registered Users Posts: 5,119 ✭✭✭homer911


    If you borrowed 3 years ago, the chances are your LTV is over 100% at the moment


  • Options
    #6
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    homer911 wrote: »
    If you borrowed 3 years ago, the chances are your LTV is over 100% at the moment

    Good point - in which case lenders are unlikely to offer interest-only unless you are unable to pay the mortgage, e.g. lost your job. Even then it wouldn't be a sure thing.


  • Advertisement
  • Options
    #7
    Ray007
    Registered Users Posts: 36 ✭Ray007


    Hi

    Thanks for all your comments.

    I got a 90% mortagage, even though the bank insisted on 100%.

    I am glad I refuse, as we think we are on negative equity(given the house next door is selling considerably for a lesser amount of what we paid)

    I'l give them a call

    Regards

    Ray


  • Options
    #8
    unclebill98
    Registered Users Posts: 3,816 ✭✭✭unclebill98


    Also bear in mind that banks have changed the critiria for interest only/payment break options. Doing it to save may no longer be a valid reason in the current climate.


Advertisement