interest only mortgage

[no1physiothe]

advice please. I have a repayment mortgage of 70 thousand, value of house 150 thousand but need to sell home to share equity(40 thousand) with ex. should i just sell up which would incur costs and buy another house or get an interest only mortgage for either the full amount(110 thousand) or interest only mortgage for 40 thousand equity payment to pay ex.

[WoWo]

What happens at the end of the interest only mortgage period and you have to pay the full amount back?

Unless you expect (almost know for certain) you will be getting money to the value of the house in the future or have an investment vehicle in place you should not consider interest only.

You can't mix and match a mortgage, i.e. half have an interest only and half a repayment.

[Sparkles3]

Assuming you can afford to pay the �70K mortgage and it is on a good deal, interest rate etc. I would leave that alone until the deal expires and try and get a separate mortgage for the extra �40K. Are you wanting to do interest only on the basis that you will sell it at the end of your mortgage period, or is it based on not being able to afford to pay another �40K on repayment?

You can have a mix of interest only and repayment, my mortgage is that. It is more complicated though, as we are paying endowments to pay (hopefully!) for the interest only bit, the mortgage on the interest only bit, plus the repayment bit, plus life insurance on the repayment bit in case of personal disaster. If you haven't done so already, it would be worth researching how much taking a new mortgage of �140K would be in comparison with the true cost of interest only (unless you're not intending to save to repay). Try www.moneysupermarket.co.uk to give you some idea of good deals around at the moment.

As there is so much for you to consider, I would strongly recommend going to an Independent Financial Advisor. You don't necessarily have to pay for their advice, so it might be worth finding out if there is one near to you that you could talk to. I'm sure they would be able to help you find the most appropriate and financially beneficial option.

Good luck.

[Postdog]

Sorry, gotta go out, and haven't read the question or the answers as carefully as I could have. Just saw the thing about mixing and matching capital and interest and interest only.

My own mortgage is a mixture, though it didn't start out that way, just interest only. I am one of those affected by endowment shortfalls, so one of the things I have done is convert part of that to a capital and interest. Unfortunately, I can't afford to do that with the whole amount, but, using my original endowments and the �20,000 for the changed bit, it should work out.