When we travel we are thinking of changing our mortgage to interest
only as the rent will not cover the mortgage while we are away. Can
you think of a better option?
Q.
My partner and I have just taken a mortgage on a variable rate
and we are now saving to travel in May 2010. We are putting our
savings in the MISA account - is this our best option? When we
travel we are thinking of changing our mortgage to interest only as
the rent will not cover the mortgage while we are away. Can you
think of a better option?
A.
The MISA account is a great idea provided it pays the same
interest rate as you are being charged on your mortgage. You will
need to advise both the bank and the insurance company when you
vacate the house and rent it out but make sure the bank does not
charge you an extra interest rate if you wish to move the loan to
interest only. If the loan was on a 30 year term the repayments
would little more than interest in any event.
Each week financial advisor Noel Whittaker answers your
questions.
