Moving to Interest Only

[playerone]

I want to reduce the amount I pay myself for a period to help get a new project off the ground. I have called the bank and they want me to jump through quite a few hoops to change the mortgage to interest only including going to an underwriter again.

What reason would they have to stop me moving? I know they would like to ensure that a repayment vehicle is in place but on what basis could they refuse it?

Lender is A & L.

[scotal]

playerone said:

What reason would they have to stop me moving? I know they would like to ensure that a repayment vehicle is in place but on what basis could they refuse it?

Lender is A & L.

Its at their discretion, currently a number of lenders are simply refusing to change repayment mortgages to i/o. Some are refusing only on high ltv mortgages, so if you are over 75% ltv you might have a problem. If they don't like your choice of repayment vehicle then they may well choose not to allow i/o lending.
Business lending is a funny one with lenders, alot will not allow further advances for business purposes, so I assume they will take a similar view with a switch of repayment type.
The lenders are under more pressure to explain i/o lending to the regulators (as are brokers) as its seen as irresponsible for the lender not to check you can repay the mortgage in the future.