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I have interest only mortgage but no endownment policy. Do I just need to pay back the original mortgage amount as the interest is being paid?

HMac
by HMac 24 June 2012  |  Comments 4 comments  |  Love Love  0 loves

The mortgage is with Santander and is only for £15,000 as part of a shared ownership policy. The endownment policy was cancelled some time ago and was never replaced. As the amount is quite low I just want to check that I only have to pay the £15,000 as the interest is being paid monthly? Thank you.

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Comments (4)

  • MikeGG1
    Love rating 881
    MikeGG1 posted

    The short answer is Yes. You only need to pay the £15,000.

    That is a very low amount these days, so consider applying to the co-owner to take on a higher amount.

    Mike

    Posted on 24 June 2012 | Love Love  0 loves Report
  • MikeGG1
    Love rating 881
    MikeGG1 posted

    Sorry, I should have added that there would be fee for removing the mortgage from the deeds (Land Registry) and legal costs.

    If you are considering taking a higher proportion of the property then it would be better while it is still mortgaged. You then don't have the fees to pay twice.

    Mike

    Posted on 25 June 2012 | Love Love  0 loves Report
  • HMac
    Love rating 0
    HMac posted

    Thank you, that's very helpful and I may contact the housing association to discuss increasing the share. Meantime, if I want to save for the existing £15k to be paid back in 12 years time, is it a life assurance policy that I require? Thanks.

    Posted on 25 June 2012 | Love Love  0 loves Report
  • MikeGG1
    Love rating 881
    MikeGG1 posted

    You don't want a Life policy for repayment.

    You would probably be better switching to a repayment mortgage or making overpayments as and when you can afford to. You can probably overpay by up to 10% of the amount outstanding at the start of the mortgage year. Overpayment is more flexible.

    Life Assurance to pay off the mortgage if you die should be in place but only if you have dependants (wife/partner/children).

    Mike

    Posted on 25 June 2012 | Love Love  0 loves Report

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