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12 Month Interest Only Mortgage

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  • 08-03-2011 5:17pm
    #1
    Doc47
    Closed Accounts Posts: 39 ✭


    Hi.

    My lender (START) has offered me a 12 month interest only mortgage, to help until I can get back working, but I'm not sure what its going to cost me long term, and they haven't said either.

    Currently the balance is €82000 over the next 13 years.

    My current monthly repayment is €680

    They said Interest only will work out at about €320 a month.

    What can I expect my repayment to be after the 12 months ?

    My life cover is for €100k - Should this be reviewed too ?

    Tia


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    #2
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    I could be wrong,

    But if they're switching you to 12 months interest-only, does that mean that next year you will have 12 years left on your mortgage?

    I'm guessing your current rate is 4.125% going by your repayments. This means that your repayments will jump to about €720 when you are taken off the interest-only rate - assuming that this time next year you have only 12 years left on your mortgage.

    Your life cover is supposed to naturally track your repayments and reduce as appropriate, but no harm to update it.


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    #3
    Doc47
    Closed Accounts Posts: 39 ✭Doc47


    Thanks Seamus.

    Yes, that would leave 12 years to end of mortgage.

    Not committed to it yet....food for thought..

    Thanks Again.


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    #4
    ANXIOUS
    Registered Users Posts: 3,095 ✭✭✭ANXIOUS


    Doc47 wrote: »
    Currently the balance is €82000 over the next 13 years.

    My current monthly repayment is €680

    They said Interest only will work out at about €320 a month.

    What can I expect my repayment to be after the 12 months ?


    Tia

    Hi,

    I'll do a simple calculation to show you an outline ( 680 - 320= 360) which is your capital repayments.

    (360*12= €4320 yearly capital repayments)
    ( 12*12= 144 months) (€4320/144 = €30 higher payment)

    so basically you'll be paying around €715 after the year interest only.


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    #5
    Doc47
    Closed Accounts Posts: 39 ✭Doc47


    Many Thanks Anxious.....


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