Going intrest only for a period!
- Thread starter airgead07
- Start date
not sure of your total situation but couple of thins of note. If you are currently on a Tracker rate the bank will prob agree to the interest only if you agree to switch to a variable rate. Remember that you wont be reducing the amount you borrowed only paying the interest during the period you are on interest only. Most banks can be approached re varying repayments but responses vary greatly on a bank by bank basis and will depend on your length of time with them etc
moneyhoney
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Not always - I switched to interest only with AIB last month & will revert to my tracker rate after the 2 years.
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dennigerz
Guest
I think you are going to end up paying a higher interest rate by the bank in two years time because you went interest only now, and it's like a punishment to you for doing that
Hi, I have gone this route myself, and they way I look at it is, if you are struggling to meet the repayments, it at least gives you breathing space. At the end of the term you can look at things again, and hopefully once you are back on track in terms of work or earnings meeting the revised repayments won't be as much of a struggle.
At the very least by keeping in touch with the bank and making an effort to put a formal arrangement in place has to be better than falling behind on payments and risking any "action" by the bank.
At the very least by keeping in touch with the bank and making an effort to put a formal arrangement in place has to be better than falling behind on payments and risking any "action" by the bank.
moneyhoney
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Incorrect.
I have a tracker mortgage, went interest only for 2 years. Just becuase you go interest only does not mean that your interest rate doesn't change during that period.
If rates go down, my tracker rate will go down. If rates go up, my tracker rate will go up. In 2 years I start paying capital again. That's the only thing that changes & yes I have it in writing.
Fair play to you for getting the bank to agree to this. Most banks are using clients request to change their mortgage as a way of getting out of the tracker rate . . .
As far as looking for a bank to go interest only. I was at a meeting with an underwriting of a major bank yesterday. They basically said that they want people to approach them before they hit the point were they cant physically afford the repayments. It simply makes sense.
If you know things are getting tough and are going to get tougher, approach your bank, whatever we think about them, they want to be repayed and dont want to have to repossess and sell your house!!! I wouldnt go as far as to say that the Banks actually want to help you out, more they want to help you, help them (in the long run)
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dennigerz
Guest
This post will be deleted if not edited immediately your very touchy on that aren't you, i'm just passing on what i was told by my bank, so take a chill pill and dont be so rude
moneyhoney
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No I'm not touchy at all. I was merely pointing out that what you posted was incorrect.
You said in your post: I think you are going to end up paying a higher interest rate by the bank in two years time because you went interest only now, and it's like a punishment to you for doing that.
That was incorrect and bad advice to anyone (like the OP) who may be seeking interest only for a period.