Where can I buy a product that will pay off an interest only mortgage. 80,000.00 with 19.5 years to pay.

Asked by niaill

6 Answers

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Answered by Graham Cooper, IFA in Brighton, EAST_SUSSEX
Why dont you just convert to a repayment Mortgage | 04.05.12 @ 15:08
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
Answered by Graham Cooper, IFA in Brighton, EAST_SUSSEX
If you require a repayment tool I can do this for you. For your information the monthly premium would be £207.

Please contact me if you require further information.
01273 390951
info@grangefinancial.co.uk | 04.05.12 @ 15:19
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
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Answered by niaill
We have a secured loan that we want to pay off quicker. Long story but this seems the best way to make our monthly outgoings less to pay off the secured loan. I already have a repayment mortgage just wanted to change for a short period approx 5 years. Is it worth it?? | 04.05.12 @ 15:19
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
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Answered by niaill
That seems like a lot more than I thought. Maybe not the best solution.
| 04.05.12 @ 15:29
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
Answered by Graham Cooper, IFA in Brighton, EAST_SUSSEX
Why do you not consider consolidation your mortgage & secured loans together and then arranging this on a repayment basis?
Please contact me if you require further information.
01273 390951
info@grangefinancial.co.uk | 04.05.12 @ 15:38
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
Answered by John Stirling, IFA in Saffron Walden, ESSEX
Well, 80k over 19.5 years; 19.5 years is 234 months. So without any growth the cost would be £341.88 pm. Then it is just a case of deciding a growth rate - obviously it needs to be after tax and charges, so the required growth rate before tax and charges will be more (the regulatory way is in reverse, but if you are calculating things out then this is the easier way to do it).

So from a mathematical point of view (i.e. this is not an illustration) the quote above from Graham is assuming a net of charges and tax return of 4.91% per annum or thereabouts.

If you assumed a net of charges and tax return of 10% per annum the cost is £118 pm, if you assume 3% per annum then it is £253 pm.

The harder your money works the less you need to spend. (This is not advice - DO NOT take 10% as a reasonable long term growth rate, it isn't)

I would suggest that Graham's number is a pretty good choice for where to set your target if you want an investment option.

In relation to achieving your objective though, an investment vehicle isn't the right option. Assuming your lender will assist then converting to interest only without a repayment vehicle, using the funds to pay off the secured loan, and then converting back to capital repayment over the remaining term will be the most cost effective low risk method of repaying your debts.

Absolutely reducing the capital reduction on cheap money, and increasing the capital reduction on more expensive money is the right thing to do - provided your lender will assist. Sadly most won't.
| 04.05.12 @ 15:51
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$commenter.renderDisplayableName() — {comment} | 10.22.17 @ 15:28
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Answered by

Graham Cooper
Graham Cooper, IFA in Brighton, EAST_SUSSEX

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