interest only Mortgage coming to an end

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29 Dec 2015 19:50 by Johnhealthy Star rating. 1 posts Send private message

I have 18 months left on a 10 year interest only mortgage with RBS in Gibraltar. The loan is completely up to date, but RBS are refusing to renew or extend, claiming that they have left the Spanish mortgage market. I will not have the funds to repay as the value of the house has reduced over the last 8 years and I am unable to sell the property (it has been only the market for 2 years).

Do I have any options with RBS? They say I do not - other than paying back in full.

Has anyone else been in this situation, and what was the outcome?





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29 Dec 2015 21:19 by baz1946 Star rating. 1830 posts Send private message

Not to do with Spain or Gibraltar, but hundreds, maybe thousands are in the same boat in the UK with these mortgages coming to an end and no funds to pay them of, I know of a few here who have taken out these so-called life time mortgages, otherwise known as a loan that never gets paid back until you die and the house is sold of to pay back this loan...Plus exorbitant interest rates, if indeed you could get something similar where you are.

Personally I think both of these are crap ways of borrowing money, but between a rock and a hard place it's a hard situation to be in.

  In 18 months time also things might change for the housing market and your finances, who knows? But it is wise to prepare early for the outcome.





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30 Dec 2015 09:15 by kitz Star rating. 7 posts Send private message

I know how you feel - I will be in this same situation in a few years both with Spain house and UK one.  It's really worrying.  I am hoping things will improve and I can at least sell the Spain house although, like yourself, I would only get about half of what I owe on the mortgage if it even sold.





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30 Dec 2015 17:16 by acer Star rating. 1039 posts Send private message

I'm  not sure that Interest Only mortgages are generally available any more as they're thought likely to give banks and building societies a few problems. 

But to deal with your present situation why you don't change to a standard repayment mortgage.  If you have equity in a UK property that may be simpler and cheaper, but some lenders in the UK lend on foreign properties. 

There are lots of new deals available as per the Sunday Times who've been campaigning for fairness for those a few years older.  You can now get a mortgage until 85, not everyone's choice, but it does mean you can spread the repayment over a longer period and keep the amount of monthly repayment down.

I suggest you speak with a good broker, there are lots, but I've had good experiences with John Charcol for a UK property http://www.charcol.co.uk and also Conti Financial Services http://www.mortgagesoverseas.com/ for a mortgage on a Spanish Property.





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31 Dec 2015 21:07 by Marksfish Star rating in Puerto Rey, Vera, Al.... 2437 posts Send private message

Marksfish´s avatar

Our mortgage was 10 years interest only with 15 years repayment. Ours comes to an end next year I think, mortgage payments will increase hugely. What we should have done is when interest rates reduced, we should have saved the money saved on monthly payments to use at this time. Ho hum, will start worrying about it next year smiley

Mark



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22 Jun 2017 17:01 by robgovier Star rating in London. 1 posts Send private message

Hi 

I am a specialist Spanish mortgage broker and it is true that RBS have withdrawn from the market and, in our expereince, will not renew or extend your current mortgage term. The only option would be for you to re-mortgage onto a repayment mortgage, as new interest only mortgages are no longer available. The good news is that interest rates are currently very low in Spain with a number of lenders able to lend up to age 75.



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R Govier



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22 Jun 2017 19:20 by Marksfish Star rating in Puerto Rey, Vera, Al.... 2437 posts Send private message

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What a bummer that you only have one post on a old thread, could have done with sending you a pm sad.



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