Interest only on mortgage

[Satanta]

Im confused, so basically you are all advising that interest only will only see me through for a year but in the end my payments will be higher.

No. You can go to interest only for as long as you like, but the total cost of the mortgage over the entire term will cost you more and more as you stay on interest only (your paying nearly €10k a year and still owe the same amount).
If you feel the short term debt is more important the the total cost of the mortgage (given your situation it probably is) then this is fine.

Do be sure to check what fees/penalties will be due for switching.... (and if you can switch given that you recently signed to the fixed??)

When you do decide to go back to normal payments (covering some of the amount owed as well as the interest) the amount owed will be exactly what it is when you begin the IO payments. So you certainly won't be paying any "less". The amount you'll pay will be dependant on the term remaining (which will be less so you'll have increased payments from this) and the interest rates at that time (which can go either way).

if I was to sell, i.e, house cost 190,000 and word of mouth now says the house is worth 280,000, would that mean that I keep the balance of 90,000 or do I have to still pay interest?

This depends on the Ts&Cs of your mortgage. Given that you signed for a fixed rate fees will have to be paid. How much they will be is down to the individual lender.

Other costs will/could also arise. Solicitor fees (~2k), Estate Agent fees (~1%), any potential SD or CGT liability (if the property was always your PPR - home - from time of purchase then exempt).

 

[techman]

If you sell for €280k and the mortgage outstanding is €190k, you keep the balance and the mortgage is cleared.

Get you house valued. Look at all the options.

You ca go IO for a period of more than a year.