Can you get two types of mortgage on one property?

Ever wondered if you get two types of mortgage on one property, if they are with the same lender and being paid by the same person?
.
Drawing on years of experience mortgage adviser Katie Tucker - of mortgage broker John Charcol (www.charcolonline.co.uk) - answers your questions.

Laureen G asks:
Is it possible to have two separate mortgages with the same lender, on one property if they are both applications from the same person?
eg a repayment over eight years and a separate interest-only over 18 years?

Katie responds
Yes this is just called a "Part and Part" and most lenders will do it for you. However, this sort of loan is all one mortgage, just made up of two parts, so you will apply for it as normal as one mortgage.

Lenders can also accommodate two different terms, 18 and eight years in your case, although you will need some advice as to why you would want different terms; there are legitimate reasons but please make sure yours are right.

Part and Part mortgages are widely used by people who have a savings or endowment plan that will only cover part of their interest only debt, so they arrange the remaining part or a repayment basis.

This does not have to be your reason though: It is a good way of having the security of some of your loan on repayment, whilst keeping your costs down if your budget won't stretch to having all the loan on repayment.

A mortgage advisor or your lender will be able to calculate the exact payments for various combinations of loan amount and term.

Please remember that it is vital that you have some sort of plan for how you are going to repay the interest only part at the end of the loan term.

If you have a question for Katie, go to www.myfinances.co.uk/askthemortgageexpert

For more information on the issues discussed here, go to www.charcolonline.co.uk or call 0800 358 5560.

Charcol Limited is authorised and regulated by the Financial Services Authority (FSA registration number 427339). The FSA does not regulate credit cards, personal loans or some investment mortgage contracts. Some Buy To Let mortgages are regulated by the Consumer Credit Act (CCA).