Customers with interest only mortgages
Repaying your mortgage at the end of your term
Is all or part of your Co-operative Bank or Britannia mortgage on an interest only basis? If so, this means your monthly payment pays only the interest charges on your loan. It is important that you plan how you will repay the outstanding balance on your mortgage at the end of the mortgage term.
You should regularly review your repayment plans to ensure they remain on track to provide sufficient funds to repay your mortgage in full at the end of the term. If your plans are not on track it is important to make alternative arrangements now. If you have insufficient funds to repay your mortgage at the end of the term it may be necessary to sell your property.
Worried about repaying your final balance?
Don’t delay - the sooner you take action the better. There are a number of ways to close the gap between your outstanding mortgage balance and the value of your current repayment plan e.g. an investment or savings scheme (such as ISA, endowment policy or pension lump sum) which is used to repay an interest only mortgage at the end of the term. In addition, the following options are available:
Switch
You could convert some or all of the outstanding balance of your loan to a capital & interest repayment mortgage over a term suitable and affordable to you. We will not charge you for switching from an interest only mortgage to a capital & interest repayment mortgage. This option will ensure that your mortgage will be repaid at the end of the term. If you wish to discuss this matter further please contact us on 08000 288 288.
Call chargesOverpay
Making additional payments will reduce the outstanding mortgage balance, which in turn will reduce the amount of interest you are charged and leave you with less to pay when the term expires. Early repayment charges may apply and the details of these will be stated in your original mortgage documentation.
Lifetime mortgage
One option could be to consider taking out a lifetime mortgage to pay off your outstanding mortgage balance with us. A lifetime mortgage is a form of equity release secured against your home which is repaid on death or on moving into long term care. The Co-operative Bank doesn’t offer this type of mortgage, but we have partnered with Legal & General to offer their Lifetime Mortgage product to our customers. A lifetime mortgage is not suitable for everyone and acceptance is subject to eligibility criteria.
Find more information on Legal & General Lifetime Mortgages, or please contact us for more information.
Independent Financial Advice
If you have concerns regarding your existing repayment plan or require advice on suitable plans we strongly recommend that you seek advice from an Independent Financial Adviser.
For useful information and free impartial advice about interest only mortgages, visit the Money Advice Service.
- Please remember it is your responsibility to ensure that you have enough funds to repay your mortgage at the end of the term.
Discuss your mortgage
Get advice from our friendly mortgage advisers.
Your home may be repossessed if you do not keep up with repayments on your mortgage
Important information about our call charges
Calls to 0800 and 0808 numbers are free from landlines and mobiles. Calls to 03 numbers cost the same as calls to numbers starting with 01 and 02. Calls to 0845 and 0870 numbers cost 3p per minute, plus your phone company's access charge. Calls to 0844 and 0843 numbers cost 7p per minute, plus your phone company's access charge. If you're calling from outside the UK, call charges may vary.
Calls may be monitored or recorded for security and training purposes.
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- Legal & General is an external company to The Co-operative Bank and not part of the same group
- The Co-operative Bank acts as an introducer to Legal & General for Lifetime Mortgages
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