Options for Tracker on Interest Only

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MovingHome

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Trying to help a family member in the current rate rising environment:

Loan: c.225k remaining, c.15 years
Rate: ECB+1.5%,
Originated: BOSI c.2006/7 loan, now serviced by Pepper, I think

They are currently on interest only due to ill health and not being able to work. My questions are:

1. whether they should fix their rate now due to rising ECB rates?
2. If they do fix, could they even remain on an IO? Capital and Interest payments would not be affordable for them at this time
 
Is there positive equity in the property?

If so, would it not make sense to sell the property and clear the mortgage?
 
Hi Moving Home

Pepper does not offer fixed rate options.

I am not sure if they would make an exception as part of the Mortgage Arrears Resolution Process, but I doubt it.

I presume that it's their family home, and while 3.5% of €225k is €8,000 a year, that is a lot less than it would cost them to rent the house?

They should talk to Pepper but Pepper will put them under pressure to sell.

They should not sell but they should continue to pay what they can afford.

Brendan
 
They also need to think about the long-term plan for clearing the mortgage in 15 years. But if there is nothing that they can do about it now, then maybe don't raise it with them.

Brendan
 
Sarenco said:
Is there positive equity in the property?

If so, would it not make sense to sell the property and clear the mortgage?
Click to expand...
I would estimate they are only marginally in positive equity at this stage, but this could be an option in time yes
 
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