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Converting mortgage from interest-only to repayment?

Kirsty78
by Kirsty78 07 January 2009  |  Comments 1 comment  |  Love Love  0 loves

I currently have an interest-only mortgage of 32k which I have had since October 1999.

Due to the recent drop in interest rates we are seriously considering switching to a repayment mortgage. We currently have savings of approx 17k in ISA's and high interest regular savings accounts. I have a SVR mortgage with a local building society who have dropped their rates from 6.75% to 4%. I would also say that my endowment currently has a shortfall of 3k.

How easy is it to switch to repayment and are there normally any fees? We will also look to move in 3 - 4 years time so wondering if worth it in long-run.

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Comments (1)

  • MikeGG1
    Love rating 824
    MikeGG1 posted

    You would probably need a new mortgage deed which would cost something - how much I don't know.

    Does your current mortgage deed allow you to make partial repayments without penalty? If so, I would follow that route (especially as you will need a new deed when you move) as long as the net rate on your savings is lower than the 4% you mention, or whatever it is likely to be next month. A drop in Base Rate is anticipated for tomorrow.

    Posted on 07 January 2009 | Love Love  0 loves Report

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