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Interest only Mortgage?

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  • 25-06-2009 11:19am
    #1
    dave1982
    Registered Users Posts: 4,604 ✭✭✭


    On radio this morning woman was on talk show saying she switched to a Interest only Mortgage.That her repayments went away down is this hard to arrange with bank i'm with First active.Also on variable rate:confused:


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    #2
    Sleipnir
    Registered Users Posts: 5,514 ✭✭✭Sleipnir


    It's not quite as simple as you probably think. Have you looked into what an interest-only mortgage is?

    People hear "I switched to <insert mortgage type here> and my monthly repayments went down" and say "that's the one for me. Where do I sign?"


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    #3
    tinofapples
    Registered Users Posts: 2,958 ✭✭✭tinofapples


    We went interest only for the first 3 years of our mortgage and while repayments are a lot easier its of no real benefit to you unless you're struggling financially. Obviously you're not paying any capital back during that period, like fighting a losing battle !!


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    #4
    dave1982
    Registered Users Posts: 4,604 ✭✭✭dave1982


    Yeah thanks thing is i'm out of work at the moment so every little bit less i have to repay the better.I'm 4 years into a 40 year term.


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    #5
    tinofapples
    Registered Users Posts: 2,958 ✭✭✭tinofapples


    In that case i would defo talk to your provider, its in their interest (Excuse the pun) that you keep making repayments even if it is only interest you're paying back.


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    #6
    dave1982
    Registered Users Posts: 4,604 ✭✭✭dave1982


    Thanks let ye know what they say:D


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    #7
    ferga_com
    Closed Accounts Posts: 159 ✭✭ferga_com


    If things get really tight for you, you could also ask your lender for a couple of months break from repayments. That's costly as they'll add the skipped repayments on to your loan and then you'll pay interest on them, so interest-only is better, but if you're stuck...

    Have you looked into Mortgage Interest Supplement?


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    #8
    daheff
    Registered Users Posts: 5,864 ✭✭✭daheff


    dave1982 wrote: »
    Yeah thanks thing is i'm out of work at the moment so every little bit less i have to repay the better.I'm 4 years into a 40 year term.


    chances are if they do let you go interest only for a year or two when you do go back to paying off capital as well they will reduce the term of your mortgage (as its 40 yrs)...so that you still pay back the total amount over 40 years (because interest only is pausing the payback time)


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