If you’re on an interest-only mortgage, most new lenders will expect you to have a repayment plan to repay the outstanding mortgage at the end of its term and be able to provide proof of your ability to repay.
If you can’t show a repayment plan, it’s unlikely that you’ll be able to benefit from new switching options.
However, some lenders might be able to offer options that include switching part of your mortgage to repayment (capital and interest).
This will increase your monthly payments but leave you in a better position to repay your mortgage later or by arranging to make overpayments to reduce the overall debt, which could make it easier to remortgage in the future.
If you’re worried you won’t be able to repay the mortgage, or you have less than five years before the end of your mortgage term, act now to understand your options and what you can do to improve your position.
Acting early will put you in the best possible position at the end of your mortgage or improve your options to get a new better mortgage deal in the future.
If you feel you are a mortgage prisoner because you’re struggling to switch to a new lender, or you have an interest only mortgage you can’t repay, get in touch. We can signpost you to expert guidance to explore your options.