mortgage dilemma

[cookiee69]

i am currently paying an interest only tracker mortgage. This is because i am a single mum and when my husband moved out last year i wanted to reduce the payments.
now however, i am doing ok and would like to start paying the interest again.
however, i keep reading that people are changing to interest only becaue of the rate rises. also, should i change from a tracker to a fixed trate?
finally, i have to stick with my current building society.
And really finally, if anyone knows a good financial advisor in the north london area I'd be really grateful.

[dasherman]

You really should start paying off the capital as soon as possible as you can't rely on the housing market increasing and paying it for you!

This may help - http://www.mortgagesorter.co.uk/types_mortgage s_interest_only.html

I would say reverting to a standard repayment mortgage is best and if you can get a good fixed rate then go for that as there are interest rate rises in the pipeline.But watch out for arrangements fees,etc as they have gone through the roof recently.

[Postdog]

Like you, I have (in the main) interest only. You don't say if you have endowments in place. I believe this is asked by the lender, but as we all know, there can be shortfalls in any case.

I have basically mixed and matched my mortgage. Some - the bulk - is on intersest only but small chunks are capital and interest, on which I overpay. This way I am keeping my payments low, but paying what I can on the capital and interest to reduce the sum borrowed. I've already settled one chunk this way, and converted a bit more of the remainder to capital and interest.

Why do you have to keep the same lender? If you are tied in to a mortgage because of some deal, then wouldn't you be tied to the same mortgage as opposed to the same lender.

[Oneeyedvic]

The main people who are sticking to interest only mortgages are with buy to let investments, where they are relying on an increase in the value of the property, or new buyers who cannot afford to pay any more than they are paying.

If you can afford it, I really would go to a repayment mortgage.

Be aware of what the payments are now, and also what they will be if the interest rate rise. Make sure you can afford the higher payment.

Best guess is that interest rates will rise by at least 1/2 per cent in the next couple of months and possibly by up to 1% by the end of the year.