Help and support

Mr and Mrs Allen have three children who will be moving out in the next few years. They have an interest only mortgage with a balance of £192,000 to repay at the end of their 14-year term but have no repayment plan in place to deal with this.

The Allens plan to remain in the family home for the rest of their lives so have started thinking about what they need to do to prepare themselves for their mortgage term-end.

The Allens contacted an independent mortgage broker, who reviewed their income and expenditure and they found they could afford to switch part of their mortgage to a repayment basis, with the rest of their loan remaining on interest only. This is known as a part & part mortgage.

Two years later, the Allens had paid off other non-mortgage debts so spoke to their broker again as they now had more disposable income.  Following this appointment, they found they were able to convert the remaining amount to a repayment mortgage which will fully repay the mortgage at the end of the term, provided they keep up with their monthly payments.

During the process, the Allens were very clear with their mortgage broker about what they could afford to spend, so made amends to the repayments when they could.

Mr Pitts had two buy to let properties that had three years left until the end of their interest only mortgage terms. He planned to the income from these investments properties to repay the balances at term end.  He reviewed his rental investment income and realised he would be unlikely to cover the full mortgages at the end of the term, as one property needed a lot of repairs.

Mr Pitts used our online calculators and read through his options and has confirmed that he can afford to make regular monthly overpayments to both accounts during the remaining term that would cover his expected shortfall.

As a customer with a single buy to let mortgage, Mrs Wright was concerned about potential interest rate rises in the future. She was aware that we were unable to offer fixed rates or other new deals, and that any increase in interest rates would mean higher payments on her mortgage. Mrs Wright had considered remortgaging for a better deal, but her current Loan to Value (which is the amount they owed compared to how much their property is worth) of 89% made it difficult for her to take advantage of better fixed rate deals available with other lenders.

Mrs Wright called to discuss her options, and decided to make a series of lump sum overpayments on her mortgage as and when she could afford to do so in the future.  This would reduce the amount she owed and could improve the loan to value of her mortgage, assuming house prices remained steady or increased in the future.

It only took a few minutes to make her first overpayment, and by following this plan, Mrs Wright hopes to be in a better position to remortgage elsewhere before her mortgage term ends.

Mr Phillipson had two buy to let properties with interest only mortgages, and both were approaching term end. He called us to discuss his position, and we told him that we are unable to offer him a term extension or new mortgage deal.

As he did not want to sell either property but did not have the funds to fully repay the amount he owed, we suggested that Mr Phillipson could look to remortgage with another lender. We told him about the Unbiased website which he could use to find an independent mortgage broker who could help him look for the right deal.

Mr Phillipson used Unbiased and found a local mortgage broker who searched the market and successfully sourced a new lender who has provided a mortgage offer for both his properties.

When the remortgages complete, Mr Phillipson will be able to fully repay the outstanding balance he owes on both mortgages before they reach term end.

Mr Blake suffered a temporary loss of income for three months while between jobs and fell behind with his payments on his interest only mortgage.

After returning to work he completed an income and expenditure assessment with one of our colleagues and agreed on a temporary payment plan to clear the arrears in instalments over six months.

After paying off his arrears, Mr Blake decided to make regular monthly overpayments to help reduce his balance. To formalise this, he called and asked us to collect the overpayments by Direct Debit. As a result, he now pays off a chunk of his capital balance each month.

Mr Blake eventually plans to sell at the end of the mortgage and use the remaining funds as a deposit on a new home. By reducing the amount he owes through regular overpayments, he is increasing the size of his future deposit and also reducing the amount of interest he will pay over the remaining term.

MoneyHelper is a government backed body that offers free, independent and impartial guidance to help you make the most of your money.

You can find a wide range of information about interest only mortgages by visiting the MoneyHelper website.

If you need further support, you can call their advisers of use the live chat service on their website.

Citizens Advice offer free, confidential and impartial advice on legal, money and other problems. They offer confidential advice online, over the phone, and in person through their local advice centres.

For online information or to find your local advice centre, visit their website.

You may wish to seek independent advice about your options from an independent mortgage broker.

Please be aware that some brokers charge an advice fee for their services, so you may want to confirm this with them.

If you don’t have your own broker, you can visit the independent Unbiased website. You can use their website to find a broker who will then contact you to arrange an initial free, no-obligation discussion.

Once you’ve found a broker, we’d recommend you verify their details on the Financial Conduct Authority’s Financial Services Register.

To read more about remortgaging, please see the MoneyHelper website for further information. MoneyHelper is a government backed body that offers free, independent and impartial guidance.