Stu Ward

Those that still have UK properties.

What are the parameters that you must meet to be able to get one on your property without an endowment ?

We move to Aus in just over a week, and this is a last ditch attempt to reduce our monthly losses on the mortgage


Stu

llanfachreth

You do not need an endowment to have an interest only mortgage. Some lenders may stipulate you must have some sort of repayment vehicle, i.e endowment, ISA etc - however most will not ask to see proof of this.

Mrs Jackaroo

We've got an interest only mortgage on our UK property which we rent out. When we left it was more common to go for interest only buy to let than it was repayment. Shouldnt be a problem changing it at all

Caroline G

When I worked in lending we used to assign endowment policies to interest only mortgages. As far as I am aware this practice has now ceased.

We converted our repayment mortgage over to interest only as we have rented out our UK property. The lender wanted to know how we planned to repay the debt at the end of the term and we wrote that we would either sell it or pay it off from inheritance money. They didn't require any further proof or documentation.

You also get tax relief on the interest only element of the loan on your investment property so it is wise to convert it to int only for this reason as well as reducing the monthly loan payment.

joh117

We wish. Nationwide are being really difficult. We have put in our 3rd application and if this doesnt work well we are stuck. We have had to send proof of our Lump Sum from Pensions to show we can pay the house off and we had to extend the term so that the pension matures before the mortgage runs out.

We have had a nightmare in what we were led to believe would be a quick and easy process. We started trying to change back in May. We fly in 2 wks time.

Jo

joh117

We told Nationwide we would sell the house they wanted £150,000 equity in the property to do this which we dont have the house is only worth £200,000 so they rejected that idea. I dont know if its due to the credit crunch but they want evidence of how we can pay it off. We are trying employment pensions lump sum this time. 3rd time lucky we hope!

Jo

Stu Ward

We have a Nationwide mortgage and they have said the same thing to us


Stu

llanfachreth

I think it depends what you tell them you're paying it off with. All lenders are different. I suppose the bestway is to find out what they want to hear before approaching them about it...

joh117

They are not being helpful at all. We just keep getting letters saying No. Not any help in how we can reduce our payments.

We have their permission to rent the house at least! For 3 yrs anyhow

JO

MarkMC

We told them we are going to rent it out (Coventry Building Society). No problem, they worked out the best deal for me. I lied a litle and told them i'd only be in Oz for 2 years, they agreed to keep me on the 5.6% rate for the interest only, rather than upping it to more like 7% for the but to let.

The Clarkeys

Did you ask your mortgage company if they were happy to let you rent it out? we are really struggling with what we are going to do with our house and have no one look at it in 2 months and a buy to let mortgage is too expensive

MarkMC

We just had a form to fill in to notify them we were going to be renting it out. I agree buy to let interest only was nearly as expensive as paying the normal mortgage.

The Clarkeys

cheers for that. will have to look into it as don't see any liklihood we wil be able to sell in the near future so looking at all available avenues!!

kendalanita

I also have a house in the uk (on the market at the moment) but have made enquiries yesterday to start letting it out to help cover our rental costs here. We are on interest only mortgage in the uk. Two questions - do I have to contact my uk mortgage company to tell them if I let it out and 2) I am seeing a tax consultant here in Oz tomorrow - do I tell them I have a property in the UK and if so do I tell them I am thinking of letting it out - any info greatly appreciated - new to all of this!!!

Caroline G

1) Yes, you will need to ask your current lender for permission to let out the property. The managing agent and building/contents insurer will want to see confirmation of this permission. It will probably breach the terms and condition of the mortgage agreement if you do not ask for the lenders permission.

2) Yes, tell the Oz tax consultant you are thinking of letting your property out. If you do become an overseas landlord you will need to register yourself as such so that tax is not deducted from the rental income. The managing agents should have the appropriate forms. Also, any rental income received as profit will be considered income and should be declared on your Oz tax return. You can also claim tax back on expenses paid to run and maintain the property, such as, mortgage interest, repairs, costs etc.

regards,
Caroline