Interest-only Remortgage: How Does It Work?
If you are thinking of getting an interest-only mortgage, you may want to know whether it’s possible to remortgage. Likewise, if you already have an interest-only mortgage and don’t know what your options are when it comes to remortgaging, this guide is for you.
Can you remortgage an interest-only mortgage?
Yes – you can remortgage an interest-only mortgage.
What are your options?
Your options will typically include switching to a better interest rate or switching from interest-only terms to a repayment mortgage. The latter would mean you start to pay back the loan amount rather than just the interest.
How to get an interest-only remortgage?
To successfully secure an interest-only remortgage deal you will need to prove to the lender that you have a suitable repayment vehicle. A repayment vehicle or plan can include a stocks and shares ISA, an investment bond, pension schemes or the sale of a second property.
Bear in mind that if you’re using savings to settle the interest-only mortgage loan, only a select few lenders will provide a remortgage. If you want to try and remortgage by selling your current property, you will need equity of over £150,000. Again, only a few lenders will accept this as a repayment vehicle option.
With an endowment, the offer will usually correspond to the middle-projected figure from your endowment statement.
In short, widely accepted means of securing an interest-only remortgage include:
- Sale of another property (most lenders)
- Stocks and shares ISA (most lenders)
- Investment bonds (most lenders)
Contact the team at Agentis to arrange your free initial consultation. With a wide range of lenders on our books, we can help match you with the right one to secure a remortgage plan that works for you. Speak to a Whole of Market mortgage broker today to find out more about Interest-Only Remortgages.
*You may have to pay an early repayment charge to your existing lender if you remortgage.
