More existing mortgage borrowers remortgaging off interest-only

by Aaron Strutt

Sep 01 2016

Trinity is helping more clients to secure interest-only mortgages and lower monthly repayments when they come to remortgage.

Many borrowers had to take full capital repayment mortgages a few years ago, but now that the interest-only market has opened up there are more choices available to them.

Mortgage lenders offer customers product transfers when their rates finish and providing they do not want to extend the term or switch to interest-only, the process of switching is very straightforward.

Aaron Strutt, product director at Trinity Financial, says: “One of our clients recently lowered his monthly payments from £3,800 to just over £1,800 by switching his near £1 million mortgages, onto a part interest-only and part capital repayment deal.

“He knew how he was going to repay his mortgage and intended to use the 10% overpayment facility so he could reduce the loan amount.”  

If you have a large mortgage on a capital repayment basis the monthly payments can be particularly expensive. As many properties have increased in value and rates have dropped, the repayments often reduce substantially when you switch to part interest-only.

You will typically require a minimum income of at least £50,000 to qualify for interest-only and have a valid repayment vehicle. HSBC expect at least one applicant to earn £100,000 for interest only, while Barclays want applicants to earn £75,000 or £100,000 when they apply with a partner.

For help to secure an interest-only mortgage call Trinity on 020 7016 0790.