Bullet repayment mortgages
As a way of offering interest-only mortgages some lenders have been using the bullet repayment system. This is where lump sum overpayments are written into the mortgage contract to be paid at a certain time in the year.
Borrowers still benefit from low monthly interest-only payments, but they can make overpayments when they receive their bonus from work, or any money they are expecting.
Popular with city workers
Bullet repayment mortgages are popular with city professionals like bankers, lawyers and solicitors as they still tend to prefer interest-only. They are often happy to take control of the way their mortgage is repaid and make annual overpayments.
Aaron Strutt, product manager at Trinity Financial, says: “There are a number of private banks and a host of high-street lenders that will more than happily offer clients interest-only, providing they can see how the mortgage is going to be repaid.”
Trinity has access to one lender potentially offering borrowers the bullet repayment system and they have a 1.99% two-year fixed rate mortgage. The overall cost for comparison is 3.8% APR.
It has a £999 arrangement fee and borrowers will need a 30% deposit to access to qualify. After the fixed period the mortgage will revert to the lenders standard variable rate, currently 4%.
If you would like help to secure a bullet repayment mortgage, call Trinity on 020 7016 0790.