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interest only

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  • 28-12-2014 6:21pm
    #1
    wdmfapq4zs83hv
    Closed Accounts Posts: 563 ✭✭✭


    Just looking for some info, considering approaching our mortgage provider (ptsb) for some kind of restructuring of our mortgage. Im out of work at the moment & considering staying home for the next year or so until youngest is at school. We are completely up to date on payments, never missed one in 10 years.

    We have a tracker, would we lose it? Also how does this actually affect our payments in future? Would the term be extended or how would it work? Roughly how much would we be paying monthly if our full mortgage is €850 per month? And would this affect our credit rating?

    Any info at all would be appreciated. Obviously we will call ptsb but would be good to have some idea before I approach them


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    #2
    nlgbbbblth
    Closed Accounts Posts: 5,668 ✭✭✭nlgbbbblth


    Don't work for them but here's my opinion.
    Nicole Shrilling Cushion wrote: »
    We have a tracker, would we lose it?

    No.
    Nicole Shrilling Cushion wrote: »
    Also how does this actually affect our payments in future?

    When the interest only period expires, the repayments revert to capital and interest over the remaining term. So they'll increase because your mortgage balance will have remained static for the interest only period but the remaining term will have reduced - i.e. the repayments will now have to be spread out over a shorter timeframe.
    Nicole Shrilling Cushion wrote: »
    Would the term be extended or how would it work?

    If you want the term extended then that's a totally different situation. The bank will have to agree a brand new facility and it is likely to be re-priced at standard variable rates [or else you could fix]. Either way the tracker won't be available.
    Nicole Shrilling Cushion wrote: »
    Roughly how much would we be paying monthly if our full mortgage is €850 per month?

    Hard to say without knowing current balance, remaining term and all-in rate. Probably around €200 - €300.
    Nicole Shrilling Cushion wrote: »
    And would this affect our credit rating?

    No. Arrears i.e. missed repayments affect your credit rating. If the lender agrees a period of forebearance and it's adhered to then no agreements have been broken.


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    #3
    Nervous Wreck
    Closed Accounts Posts: 16,115 ✭✭✭✭Nervous Wreck


    nlgbbbblth wrote: »
    No. Arrears i.e. missed repayments affect your credit rating. If the lender agrees a period of forebearance and it's adhered to then no agreements have been broken.

    Pretty sure a restructure will be noted on ICB report.


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    #4
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    Nervous Wreck wrote: »
    Pretty sure a restructure will be noted on ICB report.
    Surely that's only if it involves a write-off?


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    #5
    Nervous Wreck
    Closed Accounts Posts: 16,115 ✭✭✭✭Nervous Wreck


    dotsman wrote: »
    Surely that's only if it involves a write-off?

    A restructure is acknowledgement that you are unable to meet the agreed repayments so it's likely to be noted.


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    #6
    Nialloo24
    Registered Users Posts: 48 ✭Nialloo24


    Tracker can't be touched if it's Primary residence under CCMA rules


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    #7
    dotsman
    Registered Users Posts: 3,636 ✭✭✭dotsman


    Nervous Wreck wrote: »
    A restructure is acknowledgement that you are unable to meet the agreed repayments so it's likely to be noted.

    Not necessarily, a "Restructure" can be simply agreeing alter the original repayment schedule to reflect changing lifestyle/income of the customer (similar to what the OP wants). i.e going interest only or taking a short repayment holiday while one person is out on sick/maternity leave or going back to college for a year. As long as it is agreed in advance and involves no write-off, I can't see what would be reported to the ICB as the loan was never in arrears and (when closed) is fully paid off.

    Now, if a customer is a year behind on their repayments before a restructure is agreed, then there is a years worth of missed payments on the record. Likewise, if the restructure involves a writeoff, the loan is record on ICB as partially paid.

    It's been a while since i've worked with ICB feeds, so memory is a little hazy and things might have changed over the years, but that is (to the best of my memory) how it used to work, and ultimately how it should work (ie there is no negative consequence to agreeing in advance).


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    #8
    nlgbbbblth
    Closed Accounts Posts: 5,668 ✭✭✭nlgbbbblth


    In the case where temporary forbearance is agreed and repayments return to capital and interest afterwards - adjusted to ensure that the loan is cleared within the term - then I do not think any note is made on the ICB.


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    #9
    Nervous Wreck
    Closed Accounts Posts: 16,115 ✭✭✭✭Nervous Wreck


    Ptsb website doesn't say anything about Interest Only being an option that they offer (outside of restructure agreements, presumably). Link below directs to their flexible options form; the closest thing seems to be a moratorium. T&Cs at the bottom of the moratorium page says they will share this info with ICB. Given this, I'd still say it's more than likely that, if they allowed OP to go interest only, they'd do so with the caveat that the info is shared with the ICB.

    https://www.permanenttsb.ie/media/permanenttsb/pdfdocuments/Flexible-Mortgage-Options.pdf


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