Considering Interest only

C

CharlieC

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Due to doubling up on childcare costs now 1800pcm I am considering the Interest only option for 2 years on my mortgage

I am 2 years into 28year mortgage-
Is the IO formula based on outstanding principal owed X rate X 12

I understand I will have to change my life cover

Thus far I seem to able to shave off 400pcm and when I start repaying principal I will be paying approx an extra 50 euro per month on my current outlay

Any gotchas
 
you would be mad to stay on intrest only as you will always owe the bank the same amount you could try

Hire a aupare i'm sure you will get cheaper than 1800 per month

Hire someone to mind in your home

Change your mortage term to a few extra years
 
my sister has 3 kids and got an au-pair from france costing 85 euro per week plus food /accomodation. for this she gets 35 hours a week of work (minding ,ironing,cleaning)to include two nights babysitting,the kids are picking up french too ! not a bad option if your flexible and have a spare room .
 
Shouldn't that be (amount owed * interest rate) / 12

E.g. Original mortagee for 240,000
5,000 principal already paid off
235,000 remaining on mortgage
Current interest rate of 4.75% (ECB rate + 1)

monthly repayment = (235,000 * 0.0475) / 12 = 930.21
 
Persius said:
Shouldn't that be (amount owed * interest rate) / 12

E.g. Original mortagee for 240,000
5,000 principal already paid off
235,000 remaining on mortgage
Current interest rate of 4.75% (ECB rate + 1)

monthly repayment = (235,000 * 0.0475) / 12 = 930.21
Click to expand...

Yes that would be my reasoning. I will confirm with a banker friend

Thanks for the responses, no room for nanny or au-pair
 
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