Pre-emptive switch to interest-only owner-occupier mortgage with BOI?

E

Eblanoid

Registered User
Messages
218
Summary: I've had no problems paying my mortgage for the last 6.5 years, but anticipate possible trouble in 4 months' time. BOI says that they don't do interest-only mortgages for owner-occupiers. How can I convince them to allow me to switch to interest-only, so that I can build up more savings in case of future unemployment?

In detail:
I've a repayment mortgage (variable tracker ECB + 95 basis points) with BOI.
I borrowed 90% (€158,000) over 35 years in July 2002 for a 1 bedroom apartment in D8. No repayment problems since then. The apartment's car parking space is rented out for €85 per month.

My employer believes that the company may face difficulties from June 2009 onwards unless new customers are found. So, in case the worst happens then, I'd like to switch my mortgage to interest-only NOW. Then the money that I would have put towards paying off the capital portion of the mortgage can instead be put into a deposit account with a decent interest rate. When June comes, I'll have funds that I can use to invest in a company that I run on the side (separate from my employment), rather than having to go on the dole immediately.

Has anyone else convinced BOI to allow such a switch to interest-only? What's the best approach?
 
I think that this would be a bad move at the moment. You are lucky to be on a tracker mortgage atECB +0.95%. If you were to switch to interest only, it would be on a higher rate and it would also be unlikely that the bank would pass on future imminent ECB rate cuts to you. In the end, the saving between paying interest only at a rate 2% higher than your current mortage rate would negate any saving. Better to hold onto to your valubale tracker mortgage conditions.
 
Thats a great rate of ECB + .95%, so would advise along same lines as Gringo above - dont move if you can. The likes of this tracker rate is a thing of the past.

If things get tight perhaps consider arranging a mortgage payment break with your bank- some banks offer up to 6 months. Not sure about BOI.

Downside of this is you will pay more interest on your mortgage over the long term. You could counter this down the line by reducing mortgage term when things pick up. (hopefully :))
 
You must log in or register to reply here.
Back
Top