The Question
We switched to a new mortgage deal in March and, since then, our repayments have been much higher than before. I’m paying about £120 more per month. I have just heard from a colleague at work that a round of redundancies is due and my department is the focus.
I’m really worried about what might happen if I lose my job as we will not be able to make the repayments on my husband’s salary alone. I wondered, therefore, whether we might be able to switch to an interest-only mortgage? I heard some lenders may allow this.
How would I go about looking into this. Would it be an option for us and are there any risks?
The Answer
Depending on who your current lender is, they may have entered into the Mortgage Charter which come into place in 2023.
The Mortgage Charter allows homeowners who have a mortgage and are struggling to temporarily extend their term for six months or switch their repayment method to an interest-only repayment method for six months.
Switching to interest-only for six months will give you breathing space while you find a new job.
However, please take into account your mortgage balance will not decrease during this six months and this will cause your repayments after the six-month period to be slightly higher than they are currently.
To request changing to interest only for six months you will need to speak to your lender directly.
Meet our expert
Introducing Joe Capon of The Mortgage Bubble, who is ready to answer your questions…
Joe Capon has more than 10 years’ experience in the mortgage industry. He set up The Mortgage Bubble in 2021 and it is now a multi-award-winning mortgage firm, which strives to deliver the best mortgage advice to its clients which meets their needs now and also in the future. If you have a question for Joe email our editor and she’ll pass it on to him – kate.saines@emap.com
