www.iva.co.uk

Hi

I hope this does not soud dumb, but with an Interest Only Mortgage does the term still reduce yearly and obviously towards the end if you have been paying Interest only then you would have to pay the shortfall.

Reason why I am asking is I have just received a mortgage statement and have been paying interest free for a few years and will be until the end off the IVA but the term left still says the same as last year.

Our aim was once the IVA was finished we then would go back to Capital & Interest, increase the monthly payments so that it starts reducing??.

Hi Hammie,

If you have an interest only mortgage then you will only be paying off the interest, none of the capital. When you come to the end then you will have to pay off the whole amount that is owing.

You can go back to a repayment once the IVA has finished and it you increase the payments then amount will go down.

Hi Jan
Thanks for your reply, I realise that but I thought that the term would still be reducing, and like you say at the end you would still owe.

You'll pay for the 25 years and then owe the full capital at the end. The term will not reduce.

I would speak to the mortgage lender to confirm the details on the statement regarding the remaining term.

thank you

If you go back to repayment then the term will reduce but interest only will only keep the mortgage term static.

I had an endowment mortgage for years and the term never altered. Only when there was going to be a shortfall did I change to repayment and doubled my payments overnight and I can't remember how much the term was reduced by. It wasn't a lot though.