Interest for mortgage extension project

[FintanJ]

background of a friend’s position.

He has no mortgage currently on property. Going to take out mortgage in stages to cover significant home renovation project which will take 8 to 10 months.

When do payments to bank commence ? Is interest/repayments required during construction?

 

[Monbretia]

Payments start a month after first drawdown normally unless the bank have some product with a deferred start/interest only period to facilitate construction projects. Common enough back in the boom, different varieties by different lenders, not sure if they are around now but you'd nearly need to check all lenders as the standard position is repayments of capital and interest once drawndown on the amount drawn.

 

[The Oggster]

We have just drawn down the last tranche of a loan for renovations.

When we drew down the first payment, we started payments on that amount a month or so later. The first repayment was obviously a lot lower then our next payment will be. With each drawdown, the monthly payment has gone up.

We're only allowed to fix the rate now that we've received all of the loan.