Mortgages

[Jobbo]

So anyway .....About my mortgage.

I have chosen tracker. Thanks for the advice...I think? I'm sure there was some buried in here somewhere

No problem, happy to help - it will go up tho next year

I’m sure you helped Matt immensely.

[Carlos]

Looks like the FCA is working with lenders to allow a temporary interest only window in the event of hardship.

Lenders are reluctant to do it under the current rules and inappropriate lending.

[Holley]

Looks like the FCA is working with lenders to allow a temporary interest only window in the event of hardship.

Lenders are reluctant to do it under the current rules and inappropriate lending.

Generally the current requirements for Interest Only are maximum 75% LTV, at least £200k of equity (unless you can prove you have savings that could clear it) and normally over £50k per year salary. Will be interesting to see how this changes

[Carlos]

Even then most would want to see a credible repayment strategy.

[Broccers]

So anyway .....About my mortgage.

I have chosen tracker. Thanks for the advice...I think? I'm sure there was some buried in here somewhere

No problem, happy to help - it will go up tho next year

I’m sure you helped Matt immensely.

Yep.

Anyone who thinks interest rates will drop next year is insane.

[Holley]

Even then most would want to see a credible repayment strategy.

downsizing is a credible repayment strategy with most lenders. But property has to have at least £200k equity (more in certain postcodes)

[Carlos]

You must deal with very different people to me as i find it rarely fits criteria even if appropriate for a residential loan. Excluding equity release and later life lending i can think of 1 in the last 1000 mortgages that i've arranged on an interest only basis.

Regardless its nice to see that the regulator is being flexible with lenders as regards who they allow to access i/o payments in the case of hardship.

[GG.]

Very much does depend on what part of the market you're looking at. You'll get much more flexibility if you're talking about private banking / Coutts type scenarios than from high street lenders.

I know of a couple of people who have gone down that route recently but didn't ask them exactly what had to be provided by way of a repayment plan. In any event, even going into a world where house prices are likely to stagnate or fall in the short to mid term, in the long term it is a nonsense as over 25 years even if you didn't pay a penny off the principal you'd inflate away most of the debt.

I was having this exact conversation with my dad a couple of weeks ago. He was initially dismissive of it as an option until we worked out that if he'd have done interest only for the last 25 years he'd have been down to 10% LTV anyway.

[DeskJockey]

Very much does depend on what part of the market you're looking at. You'll get much more flexibility if you're talking about private banking / Coutts type scenarios than from high street lenders.

I know of a couple of people who have gone down that route recently but didn't ask them exactly what had to be provided by way of a repayment plan. In any event, even going into a world where house prices are likely to stagnate or fall in the short to mid term, in the long term it is a nonsense as over 25 years even if you didn't pay a penny off the principal you'd inflate away most of the debt.

I was having this exact conversation with my dad a couple of weeks ago. He was initially dismissive of it as an option until we worked out that if he'd have done interest only for the last 25 years he'd have been down to 10% LTV anyway.

Welcome back!

[GG.]

Cheers!

[Carlos]

All lenders are required to assess affordability on a capital repayment basis even if some of the lending is interest only as part of the 2014 MMR regulations.

A lender can't bypass that for a regulated loan.

You can't borrow more on an interest only basis than the lender would give on repayment.

[GG.]

You may be implying this in your mention of "regulated loans" but the MMR rules don't apply (or apply differently) for high net worth individuals with income of >£300k so as I said, very much depends on which part of the market you're looking at (but that's typically where interest only tended to have been focused at anyway).

[Carlos]

Yep it would be a miniscule market.

[Holley]

You must deal with very different people to me as i find it rarely fits criteria even if appropriate for a residential loan. Excluding equity release and later life lending i can think of 1 in the last 1000 mortgages that i've arranged on an interest only basis.

Regardless its nice to see that the regulator is being flexible with lenders as regards who they allow to access i/o payments in the case of hardship.

Just done a 75% LTV Interest Only mortgage with HSBC for a client using a second property as their repayment vehicle. West Brom earlier this year for a client using downsizing as a repayment strategy, Natwest and Santander a few months ago also (max 50% LTV). All of them though we're on a good salary.

My self employed clients where their salary fluctuates seem to like it as they can choose to overpay when they like (or pay into an investment strategy instead).

I don't recommend it to everyone that fits the criteria though, some clients (even on very high incomes) just aren't good with money.

[Swervin_Mervin]

Are you a financial advisor Holley or more focussed than that? ISTR you talking about life insurance before now as well.

[V8Granite]

Holley sorted my life insurance out after a lot of other people said “computer says no”

I can now not read safety labels safe in the knowledge Treina will get a payout.

Dave!

[Holley]

Are you a financial advisor Holley or more focussed than that? ISTR you talking about life insurance before now as well.

I've been a protection specialist for 18 years and have included doing mortgages for 2 years (Residential and BTL but not commercial).

[Holley]

Holley sorted my life insurance out after a lot of other people said “computer says no”

I can now not read safety labels safe in the knowledge Treina will get a payout.

Dave!

That was never the deal

[Broccers]

How's the tracker doing Matty?

[DaveE]

I feel very fortunate (and in some ways even guilty) that we managed to clear our mortgage this year...

I don't feel at all smug though (I'm not being sarcastic BTW)