Going interest-only on tracker...

Hi,

Sorry if this has been asked before, had a good look and couldn't find the answer. Basically, I've had my income reduced significantly this year and need to move my tracker mortgage to interest-only, hopefully only for 18 months or so. I'm with ICS building society.

Has anyone had any experience doing this, with ICS in particular? What's the best way to go about it, and will they use this opportunity to shift me from a tracker (which is pretty good value) to a fixed-rate which would suit them better?

I gave them a call on Friday but they weren't overly helpful. Wouldn't answer me about the tracker question and just said they'd send me a form to apply for a change. 2 weeks minimum for an answer. I'd love to get this sorted out as quickly as possibly and don't want to drag things out too long.

Any opinions or advice very gratefully received.

Thanks,

J

James,

The best way to try and protect yourself is to start a paper trail. Write to ICS immediately, explaining your situation, detailing how your income has dropped and ask them for any help they can give you.

You could drop the letter in by hand, if that is feasible and get a record of the name of the person you handed it to and the time and date that you dropped it in. Failing that send it by registered post.

I would include a statement of income and expenditure and state that you do not wish to fall into arrears but that the full repayment is affecting your ability to cover other utilities and food (as long as that is the case).

The majority of lending institutions do not wish to have any further increase in their delinquent loan book and you should find a favourable response.

Good advice, thanks Colndas

let us know how you get on. And one as already posted, keep everything on file for next few years.... I have been there.

Maximus

James - I'd suspect they'll run with your interest only request - however, this is a material change from original agreement and I'd suspect they will move you off a tracker rate...

pjmn said:

James - I'd suspect they'll run with your interest only request - however, this is a material change from original agreement and I'd suspect they will move you off a tracker rate...

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I don't know what the policy is with ICS, but just FYI I went interest only on my AIB mortgage & retained my tracker rate.

Every lender is different, but their loan offers are similar in a lot of ways, there are usually conditions that refer to this.

The FSO encountered one such when an institution tried to claim that conversion to a fixed rate made the rate terms in the original offer null and void. He ruled in favour of the complainant and I would imagine that given he has set a precedent here it should stand that most institutions will follow that.

moneyhoney said:

I don't know what the policy is with ICS, but just FYI I went interest only on my AIB mortgage & retained my tracker rate.

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Firstly well done on retaining your tracker - I don't know what the ICS policy is either, maybe they would leave it in situ, but I do think it would be worth investigating first. Cheers....

Def. worth finding out first. I spoke to AIB first & then put my request in writing stating that if it had any impact on my tracker, my request was withdrawn.....

What's your loan to value. This could dictate whether or not the lender will consider the move to interest only?

Thanks for all the replies everyone. Loan to value is about 75% I reckon (who really knows anymore?).

I sent the request last week and put a note down that if it effects the tracker then I'm not interested. So, if they're going to do away with my tracker I'm going to have to come up with another idea - beg, borrow, steal, extend loan period etc. etc.

I'll let you know the outcome in case anyone ends up in similar position with ICS. A colleague of mine with Ulster Bank switched to interest-only on 2 mortgages with no problems and retained his tracker. Fingers crossed!

Got my reply yesterday from ICS, which was nice and quick - Interest only approved, and no mention of it effecting the original tracker deal. Nice one ;-) Thanks again for all the replies..

Hi James H did they specify a time period? or open ended?

It's for 12 months only. I'm assuming / hoping that I can extend that period if required. But according to our glorious leader we'll all be out of the mire in 6 months anyway!