Pay off some loan or use towards equity?

Suarez
Suarez Posts: 970 Forumite
in Mortgages & endowments
I am looking to move house but have a large loan.

Current House £90,000
Mortgage remaining £69,000

New House £90,000
New Mortgage £67,500

My income £15,000
Partner £10,000
One dependant

The only finance I have is a £19,000 loan. I have saved approx £10,000 so my main question is - would I be better using some of that amount to reduce the balance of the loan or better to put it towards the property equity to have a £60,000 mortgage instead?
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Comments

  • getmore4less
    getmore4less Posts: 46,882 Forumite
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    What rate is the low and mortgage for different LTV.

    How much are you paying and could you pay.
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Suarez wrote: »

    The only finance I have is a £19,000 loan.

    Suggest you try some lenders online affordability calculators to ascertain the impact. This is a significant debt to owe given your income.
  • tori.k
    tori.k Posts: 3,592 Forumite
    You will want to speak to a broker a 6k loan made 20k difference in our DIP with Halifax and we are not on much more than you 30k a year between us, no dependants.
  • CD*_2
    CD*_2 Posts: 9 Forumite
    Suarez wrote: »
    I am looking to move house but have a large loan.

    Current House £90,000
    Mortgage remaining £69,000

    New House £90,000
    New Mortgage £67,500

    My income £15,000
    Partner £10,000
    One dependant

    The only finance I have is a £19,000 loan. I have saved approx £10,000 so my main question is - would I be better using some of that amount to reduce the balance of the loan or better to put it towards the property equity to have a £60,000 mortgage instead?

    75% LTV is the trigger rate for cheaper deals.

    May depend on the interest rate on the loan versus the mortgage.
    I am a Mortgage Adviser

    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • Suarez
    Suarez Posts: 970 Forumite
    getmore4less wrote: »
    What rate is the low and mortgage for different LTV.

    How much are you paying and could you pay.

    The mortgage rate would be 1.98%. The loan rate is 3.98%.

    I'm paying £500 per month of capital off the loan at the moment including the capital element of the monthly payment.
  • Suarez
    Suarez Posts: 970 Forumite
    tori.k wrote: »
    You will want to speak to a broker a 6k loan made 20k difference in our DIP with Halifax and we are not on much more than you 30k a year between us, no dependants.

    Can i be cheeky and ask how much mortgage you got?
  • getmore4less
    getmore4less Posts: 46,882 Forumite
    Name Dropper First Anniversary First Post I've helped Parliament
    Suarez wrote: »
    The mortgage rate would be 1.98%. The loan rate is 3.98%.

    there is your answer even if you don't hit your 75% LTV your 80% rate will probably still be better than the loan.
  • Suarez
    Suarez Posts: 970 Forumite
    I understand what you're saying but my question was more in terms of what would be better to get the actual mortgage. Do lenders prefer lower debts or higher deposit?
  • tori.k
    tori.k Posts: 3,592 Forumite
    Suarez wrote: »
    Can i be cheeky and ask how much mortgage you got?

    Just under 150K that was without the loan
  • Thrugelmir
    Thrugelmir Posts: 89,546 Forumite
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    Suarez wrote: »
    I understand what you're saying but my question was more in terms of what would be better to get the actual mortgage. Do lenders prefer lower debts or higher deposit?

    Debts and deposit don't sit in different pots. What matters is the net balance. As that's how much equity you have. Nor do some lenders like a high unsecured debt level in relation to income. Loss of job/income means there's no where to hide.
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